Global Economy May Be Slowing More Than Expected, Lagarde Says
The International Monetary Fund (IMF) has lowered its GDP projections globally this month. Financial conditions have tightened, especially in emerging markets. Global stocks have slumped and interest rates are rising. They believe the tensions caused by the ongoing trade war between countries could be the result, and they are encouraging countries to put an end to it.
“We have had a good stretch of solid growth by historical standards, but now we are facing a period where significant risks are materializing and darker clouds are looming,” said IMF Managing Director, Christine Lagarde.
Could this be the tipping point for the economy to take a downward turn? It’s likely going to depend on whether or not China and the US put an end to the trade war. The two leaders will be meeting for the G-20 summit, but President Trump has already say he plans to increase tariffs even more.
While not naming any specific countries, Lagarde notes that increasing trade barriers hurts everyone, and that countries should be cutting back on their spending in an attempt to be prepared should the economy collapse. With all the tax cuts and government spending that have happened already in this administration, will the government be able to help if at all if that were to happen?