China’s Slowdown is “Healthy” — IMF’s Lagarde
“Everybody needs to recognize there isn’t going to be a big surge of demand from overseas”.
“The distribution of risks to global growth remains tilted to the downside”, the Fund said in its World Economic Outlook publication.
The disappointing global recovery – and the risk of market turmoil should the picture darken – will be on the agenda this week as Group of 20 central bankers and finance chiefs meet in the Peruvian capital. The Fed’s chair, Janet Yellen, has said the US central bank is on track to raise rates this year.
Lagarde, in her speech today, cited China and a shift in United States monetary policy as the principal causes of current global economic uncertainty.
First, China’s economic transformation away from export- and investment-led growth and manufacturing in favor of a greater focus on consumption and services.
In recent years the expression Latin America and the Caribbean, or LAC for short, has become a catch-all, used increasingly to view trends in nations that are at vastly different stages of development, in many cases not geographically proximate, and often with very little in common.
“The saga of Argentina is still fresh in everyone’s heads”, he said, referring to the blame heaped on the International Monetary Fund for its role in the country’s 2001 debt default, which still haunts South America’s second-largest economy. “And third, the adjustment to potentially prolonged cycle of low commodity prices”, she said.
Chinese authorities are hoping the addition of the renminbi to that basket will create more confidence in the Chinese currency. In terms of monetary policy and inflation rates, Latin America has more variability than any other region.
Lagarde and Kim argued strongly for removing subsidies on fossil fuels that are worth more than $5 trillion a year and on the immediate need for carbon taxes so that the burning of fossil fuels can fund clean energy replacements. “I would say it is in the USA interest to do that”, he said. Lagarde also urged Japan and the eurozone to maintain their quantitative easing programmes to stimulate their economies. “Three per cent of global output is at stake”, he was quoted as saying.
Revenues grew by 11%, down from growth of 12.1% in the same period a year ago for the week ending October 7, according to Ministry of Commerce data. “The World Bank president lauded Bangladesh before such a huge number of people – it feels really good as finance minister”.
Is it helpful to describe Latin America and the Caribbean as if it were a single entity?