As global economic policymakers gather in Washington for the spring meetings of the IMF and World Bank, a speech by IMF chief Christine Lagarde has warned that the fund’s growth forecasts for 2019 and 2020 will be downgraded next week. While still expecting an anaemic pick-up later this year, she believes that a major fiscal easing may be needed to reverse the downward trend in the longer term.
The IMF warning is consistent with Chris Giles’s latest FT report on the Tiger tracking index. This suggests that the period of synchronised weak growth among the major economies may be difficult to reverse.
Economic commentators are split between the pessimists, who believe that the world economy may even be entering a recession, and optimists, who argue that a reversal of recent policy errors and idiosyncratic shocks in the manufacturing sector will allow a return to trend growth later this year.