Warning as global economy hits 'synchronised slowdown'
The world's economy has shifted from a joint upward momentum to a "synchronised slowdown," the new director of the International Monetary Fund said in her first speech in Washington, citing trade wars, Brexit and overall geopolitical uncertainties.
"The global economy is now in a synchronised slowdown," said Kristalina Georgieva, according to a transcript of the speech.
"This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade."
She noted that because of trade tensions "worldwide manufacturing activity and investment have weakened substantially," which is liable to have knock-on effects on the services sector.
Georgieva said that all nations stands to lose in a trade war. So far, the repercussions have included broken supply chains and a growing digital divide.
In what could be seen as a jab at China and other protectionist states, she warned against subsidies, lax enforcement of intellectual property rights and technology transfers.
Georgieva also cautioned leading economies with low interest rates to be careful, saying there were "negative side effects and unintended consequences" of such a policy.
On climate change, Georgieva said that the "price of inaction" was too high and voiced support for reforming tax codes to enforce a greater tax on carbon emissions.