Trade disputes and debt threaten the growth of the world economy

April 23, 2018 9:46 amComments Off on Trade disputes and debt threaten the growth of the world economyViews: 5

IMF meetingThe increased tensions in the trade and geopolitical sphere, the unprecedented high level of global debt, and the increased financial vulnerability threaten the growth of the global economy. This is said in a communique released after a meeting of the the governing body of the International Monetary Fund (IMF).

“The demographic challenges and low productivity growth may reduce the potential for higher and inclusive growth in the future”, says the report.

In their view, the growth of the world economy “has grown and is on a wider scale because of the fast pace of investment and trade”. “In the short term, the risks are broadly balanced but will continue to shift towards (economic) decline over the next few quarters”, adds the documents.

The authors of the report point out that “the window of opportunity remains open” and “must be immediately used to implement policy measures and reforms to support the current (economic) upswing, to enhance its (stability) and growth in the medium term of the common good”.

Tax and budget policy must be flexible and conducive to economic growth and structural reforms should aim at increasing productivity, growth and employment, while helping those who bear the negatives of structural adjustment.

The IMF stresses that “a financial sector reform plan” needs to be implemented as soon as possible, fully and consistently with a view to further strengthening it. Emphasis on the importance of modern technologies, economic integration and the elimination of accompanying risks.

The next IMFC Forum will be held on October 31st in Bali, Indonesia.

World Bank Group shareholders took a decision to raise capital by 13 billion USD. Largest part of this amount (7.5 billion USD) is for the International Bank for Reconstruction and Development, and 5.5 billion USD for the International Finance Corporation. This will strengthen the capacities of the institutions that fight poverty in the world, including in areas most in need of assistance.

A number of internal measures, including ‘efficiency-enhancing reforms’ and ‘policy steps to further strengthen the Group’, have been adopted.

From 2019 to 2030, the World Bank’s global financial capability is expected to reach nearly 100 billion USD per year.

The shareholders have clearly demonstrated their confidence in global co-operation, and we greatly value this support from Member States, World Bank President Jim Yong Kim said in relation to these decisions. In his words, this package of capital will enable the Group “more responsive to the risks to global stability and security, especially in poor countries and fragile states”.

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