The growth of the world is slowing with the impact of trade strains between the United States and China, said the Director-General of the International Monetary Fund (IMF), Christine Lagarde, Monday. The statements suggest that the institution may lower its forecasts for the economy next week.
Christine Lagarde noted that world growth is currently at its highest level since 2011.
According to the head of the IMF, some risks "started to materialize", such as the imposition of customs duties and the pressure on the financial markets of emerging countries.
By July, the IMF predicted a worldwide growth forecast of 3.9 percent for this and next year.
But "the prospects have become less favorable, as you will see in our updated forecasts (which will be published) next week," Lagarde said.
The "biggest problem" is the materialization of threats of protectionist measures, said the Director-General of the IMF.
Over the past few weeks, the US government has imposed $ 250 billion ($ 216 billion) in tariffs on imports from China, accusing Beijing of practices that act as & # 39; infidelity & # 39; are considered.
Beijing responded with customs duties at 110 billion dollars (about 95 billion euros) of imported products from the United States.
"This not only affects trade, but also investment and industry, because the uncertainty is greater," Christine Lagarde said in a speech before a new trade agreement was announced between the United States, Canada and Mexico.
Christine Lagarde said that the trade war currently seems to have no effect in the United States, where the economy continues with "strong" growth driven by fiscal and financial stimuli.
However, Lagarde stressed that in Asia, where growth was higher than in other regions, "there are signs of moderation" of Chinese expansion, which "will be exacerbated by the trade dispute."
In the rest of the world, among the advanced economies, growth is slowing in the eurozone and "to a certain extent in Japan".
"Countries need to work together to build a stronger and fairer world trading system," said the IMF official.
"We need to repair the system and not destroy it," he added, at a time when US President Donald Trump threatened to condemn trade agreements and withdraw the United States from the World Trade Organization.
The IMF has also expressed concern about the growing indebtedness of the world economy.
"After a decade of relatively simple financial conditions, debt levels have reached new heights in the most advanced, emerging and poor countries," he emphasized.
Global public and private debt amounts to $ 182 billion versus $ 164 billion in April.
Global debt is almost 60 percent higher than in 2007, before the global recession, Lagarde said.
This situation, which is the result of the economic recovery after the crisis, when governments had to rescue some troubled banks and central banks, have fed markets with very low interest rates, making governments and companies more vulnerable to tightening financial conditions.
"Emerging and developing economies already feel the effects," Lagarde said.