## Opening Remarks by Christine Lagarde at World Economic Outlook Press Conference

_IMF News, January 21, 2019_

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## Bibliographic details
- Published: January 21, 2019

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### Context and overview
- Event: World Economic Outlook Press Conference, Davos
- Date: January 21, 2019
- Presented: First time the World Economic Outlook Update is presented by Gita Gopinath, new Chief Economist.
- Contact: IMF Communications Department MEDIA RELATIONS Phone: +1 202 623-7100Email: MEDIA@IMF.org

### Global growth assessment and forecast change
- The IMF had previously cut its global growth forecast in October for 2019 and 2020, partly because of the negative effects of rising trade barriers.
- Today the IMF is announcing a further downward revision of its forecast.
- Bottom line: after two years of strong expansion, the world economy is growing more slowly than expected and risks are rising.

### Risk environment — intertwined risks and channels
- Risks are significantly higher and increasingly intertwined:
  - Higher tariffs and rising uncertainty over future trade policy fed into lower asset prices and higher market volatility.
  - These developments contributed to tightening financial conditions, including for advanced economies.
  - Tightening financial conditions are a major risk factor in a world of high debt burdens.
- Geopolitical worries and disappointing long-term growth prospects amplify downside risks.
- Question addressed: "Does that mean that a global recession is around the corner?" — The answer given: "no"—but the risk of a sharper decline in global growth has certainly increased.

### Policy message and priorities
- Core message: Address remaining vulnerabilities and be ready if a serious slowdown were to materialize.
- For most countries, the recommended approach is to harness existing growth momentum to create more policy room to act, with three interrelated priorities:

  - Resilient
    - Reduce high government debt to open space to fight future downturns — but do so in a fair and growth-friendly way.
    - Monetary policy should be data-dependent.
    - Exchange rates should be allowed to act as shock absorbers.
    - Develop macroprudential toolkits to further financial sector stability.
    - Use this time for economic reforms to lift growth, especially in labor markets and infrastructure investment.

  - Inclusive
    - Ensure the digital revolution delivers for people in terms of productivity, employment, and long-term growth.
    - Help workers displaced by automation.
    - Create new and better opportunities for women and young people.

  - Collaboration
    - Effective international cooperation requires fairness, flexibility, and commitment to the common good.
    - Priorities for cooperation include: fixing the global trade system, fighting corruption and tax evasion, and addressing the existential threat of climate change.
    - The speaker calls for a "new multilateralism" to build a brighter future for all citizens.

### Scenarios and readiness
- The objective is to be in a better position for a downturn (which history suggests is "somewhere over the horizon") and for unexpected developments.
- Urgency: The new outlook shows the need for enhanced international cooperation is more urgent than ever.

*Opening Remarks by Christine Lagarde at World Economic Outlook Press Conference — Davos, January 21, 2019*

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## References

- [Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde)
- [World Economic Outlook Update, January 2019](https://www.imf.org/en/publications/weo/issues/2019/01/11/weo-update-january-2019)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2019/01/21/sp012119-md-opening-remarks-for-weo-press-conference-davos_