IMF MD Lagarde says protectionism Is darkest cloud over world economy

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The threat of trade is the biggest concern looming over a solid upswing in the global economy, IMF Managing Director said.

The “darkest cloud” on the economic horizon is the “determination of some to actually rock the system that has actually presided over the trade relationships that we have all undertaken and enjoyed to some extent over the last many decades,” said Lagarde. She was speaking on a panel with world leaders including Russian President Vladimir Putin, Japanese Prime Minister Shinzo Abe, French President Emmanuel Macron and China’s Vice President Wang Qishan in St. Petersburg, Russia, on Friday.


“The good news today is that the sun is shining on the global We went through a decade of difficult time, and now, we have an that is doing well," Lagarde said.

Lagarde said her list of worries also include high levels of sovereign and corporate debt and tighter financial conditions in from monetary tightening, particularly in the U.S.


The IMF chief has repeatedly warned against the risks of a amid aggressive steps by President to crack down on what he sees as the unfair trading practices of U.S. competitors. The on Wednesday launched a probe to determine if imported cars imperil national security, a move that could lead to higher tariffs, and next week Commerce Secretary Wilbur Ross will be in for the next round of trade negotiations to ease tensions between the world’s two largest economies.

"It would be a great mistake to resort to and This would be a self-inflicted wound,” Lagarde said. “Nobody wins a trade war.”


The IMF projects the global will grow 3.9 per cent this year and next, the fastest pace since 2011. Beyond that horizon, it’s more pessimistic, predicting growth will fade as central banks raise interest rates, US fiscal stimulus fades and China’s gradual slowdown continues.

The IMF, which has 189 member countries, was conceived during the Second World War to oversee the monetary system and promote open-market policies that drive growth.