Thu. Apr 25th, 2019

The G20 warns that the "weakening" of rich countries can spread

The G20 warns that the "weakening" of rich countries can spread

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The G20 on Friday expressed concern about the possibility that "the weakening" of advanced economies will "feed each other" and result in a further slowdown in global growth.

"We recognize the risk that growth could deteriorate if the weakening in key economies feed off each other," Taro Aso, Japan's Economy Minister, told a news conference at the end of the group's meeting held within the framework of the Spring meeting of the International Monetary Fund (IMF) and the World Bank, held in the US capital.

Aso said that the outlook points to a "rebound" of the world economy in the second half of the year, although nuanced that the risks are "biased to the downside".

He welcomed, in this regard, the relaxation of financial conditions following the recent decision of the Federal Reserve (Fed) to press the pause button in its process of gradual monetary adjustment.

As an example of the risks, Aso mentioned the commercial tensions between the United States and China, the doubts about the outcome of the departure of the United Kingdom from the European Union and the high level of global indebtedness.

"We must be alert to possible escalations of trade tensions, geopolitical risks and a sudden adjustment of financial conditions," said the Japanese minister.

Japan holds the presidency of the G20 this year.

During the week, the IMF presented its new projections for global growth, which fell to 3.3%, two tenths less than predicted in January, due to the increase in global uncertainty.

The managing director of the institution, Christine Lagarde, stressed that the global economy is experiencing "a delicate moment" and the expected recovery is "precarious".

Lagarde described as "self-inflicted wounds" the imposition of tariffs, unleashed by the aggressive protectionism of US President Donald Trump against China and to which the Asian country has responded with similar measures.

The G20 groups the main advanced and developing economies, accounting for 90% of the economy and two thirds of the world's population.


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