IMF Managing Director Christine Lagarde Calls for Decisive and Collaborative Action by G-20 Leaders as Global Growth Moderates and Risks Increase

IMF News, December 1, 2018

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Global growth "remains strong, but ... is moderating and becoming more uneven."
"Pressures on emerging markets have been rising and trade tensions have begun to have a negative impact, increasing downside risks."
"Choosing the right policy is therefore critical for individual economies, the global economy, and for people everywhere."

If "recently raised and threatened tariffs were to remain in place and announced tariffs were implemented, about three-quarters of a percent of global GDP could be lost by 2020."
If "trade restrictions in services were reduced by 15 percent, global GDP could be higher by one-half of a percent."
Policy implication: "There is an urgent need to de-escalate trade tensions, reverse recent tariff increases, and modernize the rules-based multilateral trade system."

Global debt level: "about $182 trillion by the IMF’s estimate."
Guidance for highly indebted countries: "rebuild buffers and reverse procyclical fiscal policies."
Transparency recommendation: "Increasing debt transparency, such as on the volumes and terms of loans, by borrowers as well as lenders, is as important as supporting debt sustainability."

"First, fix trade—this is priority No. 1 to boost growth and jobs."
"Second, continue to normalize monetary policy in a well-communicated, gradual, data-driven manner—and with due regard to potential spillover effects."
"Third, address financial risks, using micro- and macro-prudential tools to tackle problems related to leveraged lending, deteriorating credit quality, and high exposure to foreign currency or foreign-owned debt."
"Fourth, use exchange rate flexibility to mitigate external pressures, avoiding tariffs and other policies that could weaken market confidence."
"Finally, eliminate legal obstacles to the participation of women in the economy. This is key to tackling high and persistent inequality, and would add to the growth potential of all G-20 countries."

The G-20 "pledged to conclude the 15th General Review of Quotas by our Spring Meetings, and no later than the Annual Meetings in 2019."
Commendation: "I would like to warmly congratulate President Macri and the Argentine authorities and team on their very effective leadership of the G-20 and on hosting the Leaders’ Summit in the wonderful city of Buenos Aires."
IMF support note: "The IMF will continue to support the authorities in their endeavor."

Press Release No. 18/450 — IMF Communications Department, December 1, 2018