Home' Trinidad and Tobago Guardian : April 20th 2017 Contents BG22 | INTERNATIONAL
BUSINESS GUARDIAN guardian.co.tt APRIL 20 • 2017
The global economic recovery is picking up
steam, but the rise of protectionist rheto-
ric and the threat of trade wars could erode
those gains, the International Monetary Fund
The fund's semi-annual World Economic
Outlook report revised global growth up to 3.5 per cent for
this year, one-tenth higher than the January forecast.
It was a rare upward revision to the growth forecast---the
first in two years---which has been consistently disappointing.
For 2018, growth is expected to rise to 3.6 per cent, and to 3.8
per cent by 2022.
"The global economy seems to be gaining momentum; we
could be at a turning point. But even as things look up, the
post-World War II system of international economic rela-
tions is under severe strain," IMF chief economist Maurice
The Washington-based IMF warns of the "significant
downside risks" to the outlook, which have grown worse
Among them is "the turn towards protectionism, leading
to trade warfare," Obstfeld said in the foreword of the report.
"Whether the current momentum will be sustained remains
a question mark," he said in a press conference.
Many of the concerns---including rolling back financial
regulation, pulling away from the multilateral trading system
and restricting immigration---are centerpieces of US President
Donald Trump's policy programme.
But the issues also are visible in the bitter French election
campaign, as well as in Britain's planned exit from the European
Union, and the surprise call for elections in June.
"Clearly there is rising concern about the uncertain outcome
of the elections," Obstfeld told reporters.
The anti-trade, anti-immigration attitude in advanced econ-
omies is to some degree understandable, given "the failure of
growth gains in rich economies to substantially reach those
in the lower parts of the income distribution in recent dec-
ades," he said.
However, Obstfeld warned that, "capitulating to those pres-
sures would result in a self-inflicted wound."
He said it would harm countries by pushing prices higher and
eroding household income, and it would prompt retaliation,
worsening the global economy.
Developing countries spur growth
Economies in the developing world continue to provide
most of the impetus to global growth, led by China and India.
In its report, IMF put China growth this year at 6.6 per cent,
up a tenth of a point from the January estimate, while the
2018 prediction was increased by two tenths to 6.2 per cent.
The forecasts for India were unchanged at 7.2 per cent this
year and 7.7 per cent next.
But there were a couple of upside surprises among the ad-
vanced economies, including a half-point upward revision to
the forecast for Britain this year, to two per cent, despite fears
of a negative impact of Brexit.
And Japan's growth is now seen at 1.2 per cent---modest, but
a full four-tenths higher than three months ago.
The estimate for US growth was steady at 2.3 per cent this
year and 2.5 per cent in 2018.
"Global economic activity is picking up speed, but the po-
tential for disappointments remains high, and momentum
is unlikely to be sustained in the absence of efforts by pol-
icymakers to implement the right set of policies and avoid
missteps," the report said.
The IMF said "hundreds of millions" of people have been
lifted out of poverty through economic integration and techno-
logical progress, "helping to reduce global income inequality."
But Obstfeld said the benefits of growth and the burden of
economic adjustments too often have been unequally shared.
It will be up to the governments to "address these disparities
The IMF recommends "well-targeted initiatives" to help
workers adversely affected by free trade and other economic
changes to "find jobs in expanding sectors" as well as "social
safety nets to smooth the loss of income," and improved ed-
ucation and training in the longer term.
"Similarly, curbing immigration flows would hinder oppor-
tunities for skill specialisation in advanced economies, limiting
a positive force for productivity and income growth over the
long term," the report said.
The IMF report stressed that risks to the outlook "remain
tilted to the downside," meaning that while growth could turn
out to be faster than expected there are more negative possi-
bilities on the horizon.
Among the worries are the possibility for a rising US deficit
and the dismantling of financial regulations erected after the
2008 global crisis, which "would raise the probability of costly
financial crises in the future," the IMF warned.
China's "dangerous dependence on rapidly expanding credit"
is another area of concern, as is weak demand in Europe, and
a series of non-economic factors, including geopolitical risks
ECLAC wants regional integration promoted beyond trade
The executive secretary of the Economic
Commission for Latin America and the Car-
ibbean (ECLAC), Alicia Bárcena, wants regional
integration promoted in specific areas beyond
In addressing the World Economic Form on
the region here, Barcena said the current global
economic and political context presents "sharp
tensions and uncertainties," adding that it is
not possible to keep doing "business as usual"
Alicia BárcenaBárcena was the main speak-
er on a panel about the regional integration
strategy group, in which government author-
ities and private-sector representatives also
The senior United Nations official noted
that that regional insertion in global trade
is very low, stating that the region only has a
six per cent share of global exports, compared
with developing Asia's 31 per cent -- "which
is compounded by the end of the so-called
commodities 'supercycle'" and the fact that,
in the majority of regional countries, less than
one per cent of companies export.
"For that reason, at ECLAC, we contend that
integration must be strengthened beyond the
exchange of goods," she said. "We must make
progress on trade facilitation, on participation
in value chains, on integration of infrastructure
and energy, as well as in the technological and
During the panel discussion on "Building a
Regional Digital Market," Bárcena urged that
the region move toward development, accord-
ing to ECLAC.
"Second generation public-private alliances
are key to propelling integrated digital markets
at a regional and sub-regional level in Latin
America and the Caribbean," she said, adding
that the development of technological and dig-
ital platforms allows for "fomenting productive
diversification, growth in productivity and for
leveraging the fourth industrial revolution with
greater scale, connection, access and dissem-
ination of content."
"The platforms of new information technol-
ogies potentiate this process," she continued.
"This improves the region's competitiveness
by modernising infrastructure and technology
In this regard, Bárcena said that the Sixth
Ministerial Conference on the Information So-
ciety in Latin America and the Caribbean (the
eLAC2018 meeting) will be held in Colombia
next year, with the support of that country's
Ministry of Information and Communications
In addition to underscoring the importance
of the 2030 United Nations Agenda for Sus-
tainable Development and its 17 goals (SDGs),
Bárcena declared the agenda to be "civilising"
and "fundamental" for the region of Latin
America and the Caribbean.
Bárcena also emphasized the gender equal-
ity promoted by the 2030 Agenda, "which is
an economic issue and not just a social one."
We must guarantee the three autonomies
of all women: physical, economic and that of
decision-making, and end the statistical si-
lence about gender parity," she said, reminding
delegates that ECLAC and the Mexican gov-
ernment are organising the first meeting of the
Forum of the Countries of Latin America and
the Caribbean on Sustainable Development.
The event will be held on April 26-28 in the
Mexican capital, where the region's countries
will present their progress on achieving the
SDGs and address their means of implemen-
tation and financing.
IMF warns of
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