The International Monetary Fund (IMF) recently called for more work to further reduce global trade imbalances amid increasing tensions, while issuing freshly cautioning that such conflicts are weighing on the global economy. “It is imperative that all countries avoid policies that distort trade,” IMF said in its annual External Sector Report.
“Against a backdrop of escalating trade tensions, greater urgency is needed in tackling persistent excess imbalances,” it said.The International Monetary Fund (IMF) recently called for more work to further reduce global trade imbalances amid increasing tensions, while issuing freshly cautioning that such conflicts are weighing on the global economy. "It is imperative that all countries avoid policies that distort trade," IMF said in its annual External Sector Report.#
The report comes as IMF confronts a surge in protectionism around the world that’s seen dragging on global growth, with output slowing in major economies from China to Europe and Mexico.
“With prolonged trade uncertainty, it’s weighing on business sentiment everywhere in the world, which then has implications for global demand,” IMF Chief Economist Gita Gopinath said at a press conference on the report this week.
“We welcome the trade truce between the US and China that came toward the end of June at the G-20 meetings, and we would hope that the world would continue to work cooperatively to not only not trigger these trade tensions but also to address the issues with the multilateral trading system,” she said.
Countries with excess current account deficits, like Britain and the United States, should adopt or continue with growth-friendly fiscal consolidation, while those with excess current account surpluses, like Germany and South Korea, should use fiscal space to boost public infrastructure investment and potential growth, global newswires quoted Gopinath as saying. (DS)
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