Calls for cooperation against illicit financial flows, others

By Emma Ujah, Abuja Bureau Chief

The global economy is in a delicate moment, with 70 per cent of the nations expected to experience a slowdown in growth this year.

This position was contained in the address of the Managing Director (MD) of the International Monetary Fund (IMF), Ms. Christine Lagarde, while addressing the American Chamber of Commerce, in Washington DC,   USA, yesterday.

IMF

Lagarde’s address was the “Curtain Raiser” speech , ahead of the World Bank/IMF Spring Meetings, which would open in Washington DC, next week.

She said, “A year ago, I said, ‘the sun is shining, fix the roof.” Six months ago, I pointed to clouds of risk on the horizon. Today, the weather is increasingly ‘unsettled’. What do I mean by that?

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“In January, the IMF projected global growth for 2019 and 2020 at around 3 ½ percent, less than in the recent past, but still reasonable. It has since lost further momentum, as you will see from our updated forecast next week.

“Only two years ago, 75 percent of the global economy experienced an  upswing. For this year, we expect 70 percent of the global economy to experience a  slowdown  in growth.

“So you see what I mean by “unsettled”. Indeed, the global economy is at a “delicate moment”.

She, however, ruled out the a global recession in the near term.

The IMF boss blamed the slowing global economy on trade tensions and financial tightening.

“Global growth has been slowing, largely because of rising trade tensions and financial tightening in the second half of 2018,” she said.

3 areas of policy action

Lagarde therefore, called attention of countries to three  areas of policy action, which require to be  handled with care, with a view to avoiding policy missteps.

She said, “I see three mutually reinforcing areas of action: In  domestic policies; in  cross-border policies; and in coordinated efforts to tackle the major  global challenges we all face.”

On domestic policies, the IMF boss suggested, “policies must provide conditions at home for people to succeed, especially when it comes to structural reforms that can help boost productivity and long-term growth.

There is no one-size-fits-all, of course, policies should be customized to meet the needs of individual countries.”

Speaking on cross-border policies, Lagarde urged a more level-playing field for international trade, as well as, tough actions against illicit financial flows.

She said, “Here there are a wide range of economic issues to be addressed: upgrading financial regulations, improving debt transparency, tackling illicit financial flows, to name a few.

“But when it comes to leveling the playing field across borders, no issue looms larger than trade.  This is an area where the Chamber and the IMF share much common ground.”