Washington (AFP)
The global economy remains "at a delicate juncture" as trade tensions between the United States and its partners have increased, the IMF said Wednesday, urging G20 countries to keep interest rates low for support their economy.
"The top priority is to resolve trade tensions while accelerating the modernization of the international trading system," said Christine Lagarde, Executive Director of the International Monetary Fund in a blog published before the G20 finance to be held next weekend in Japan .
On May 10, the United States raised the tariff on goods worth $ 200 billion from China to 25 percent, accusing the Chinese authorities of not meeting their commitments to sign a trade agreement.
For its part, Beijing countered by increasing on June 1 its tariffs on $ 60 billion of US goods.
In addition, Washington threatens to increase tariffs on another $ 300 billion worth of Chinese goods, which will be tantamount to overtaxing all imports from the Asian giant.
In addition, the White House could impose, from Monday, tariffs on all imports from Mexico if no agreement was found to stop the influx of illegal immigrants arriving in the United States by through the Mexican border.
"All indications are that the United States, China and the world economy are the losers of current trade tensions," said Christine Lagarde.
The IMF has calculated that recently introduced tariffs could cut World Gross Domestic Product (GDP) by another 0.3 percentage point, half of which is due to deteriorating business confidence and market concerns. financial.
He had previously estimated that additional tariffs that Washington and Beijing had already imposed, including those in force since last year, could reduce global GDP by 0.5% in 2020.
"This represents a loss of about 455 billion US dollars, an amount greater than the size of the South African economy," said Lagarde.
Protectionist measures are not only detrimental to growth and jobs but also make consumer goods more expensive, affecting mostly low-income households, economists agree.
For Christine Lagarde, the first two world powers must remove as soon as possible "these self-inflicted wounds".
- "Stand ready to act" -
It also calls on the G20 countries to reach consensus on how to strengthen the rules of the World Trade Organization (WTO), particularly with regard to subsidies, intellectual property and trade in services.
"The goal is to create a more open, stable and transparent trading system, one that is better equipped to meet the needs of the economies of the 21st century," she said.
Meanwhile, the Fund urges policymakers to avoid "early removal of support" from their economy, in a note to finance ministers and central bankers meeting Saturday and Sunday in Fukuoka.
It urges central banks to stay on course with their accommodative policies "until new data confirm inflationary pressures".
The Fund also recommends that G20 decision-makers not be content with growth rates, which per capita remain below historical averages for many countries.
Moreover, if growth proves to be "particularly disappointing, policymakers must be ready to act", he adds, advocating the use of all the tools at their disposal, the lowering of interest rates and from budgetary measures to unconventional measures.
On Tuesday, the World Bank announced that it had lowered its growth forecast for this year (+ 2.6%), citing the persistence of trade tensions, the increase in public debt and a slowdown in some economies including of the euro area.
The IMF is scheduled to release its annual report on the US economy on Thursday.
On Wednesday, it slightly revised down its growth projections for China because of the trade war with the United States.
"Everyone is a loser in a trade war, if trade is threatened, if it is affected, growth will suffer," Beijing deputy director Kenneth Kang warned during a press conference in Beijing. -Pacific of the IMF.
? 2019 AFP