Leaving the European Union without a transitional trade deal would cost Britain about 6 percent of GDP — roughly four years of economic growth — compared with staying in the bloc, the International Monetary Fund said on Wednesday. The IMF, which warned of the costs of Brexit before Britons voted to leave in June 2016, said securing a trade deal would roughly halve the economic damage from trade barriers and reduced foreign investment and immigration. “Directors emphasised the importance of a timely agreement with the EU, accompanied by an implementation ...

Italy’s fiscal stimulus plans would leave the country vulnerable to higher interest rates that could ultimately plunge it into recession, the International Monetary Fund warned on Tuesday, recommending instead a “modest” fiscal consolidation to reduce financing costs. The IMF said after an annual staff review of Italy’s economic policies that any temporary, near-term growth gains from the stimulus is likely to be outweighed by the “substantial risk” of a rapid deterioration. “Materialization of even modest adverse shocks, such as slowing growth or rising spreads, would increase debt, raising the risk ...

Italy’s plans for an expansionary budget that widens the deficit could end up doing more damage than good for the economy, according to a top International Monetary Fund official. IMF Europe Director Poul Thomsen said Italy doesn’t have the space for fiscal stimulus and should avoid leaning on an artificial boost and instead focus on long-lasting measures. There’s even a risk of a negative effect on growth, where budget concerns push yields higher, he said. The unfavorable market response means “the cost to Italian borrowers would go up and you ...

China’s economy faces external and internal pressures, including trade friction with the United States, but should only ease policy when needed, Christine Lagarde, the managing director of the International Monetary Fund, said on Tuesday. Speaking at a news conference in Beijing, Lagarde said she was reasonably upbeat about the global economy. Source: Reuters (Reporting by Kevin Yao; Writing by Ryan Woo; Editing by Clarence Fernandez)

The world’s consumption of raw materials is set to nearly double by 2060 as the global economy expands and living standards rise, placing twice the pressure on the environment that we are seeing today, according to a new OECD report. A preview of The Global Material Resources Outlook to 2060 released today sees global materials use rising to 167 Gigatonnes in 2060 from 90 Gigatonnes today as the world population soars to 10 billion people and average global income per capita rises to converge with the current OECD level of ...

Argentine President Mauricio Macri is used to seeing bad poll numbers as he struggles to drive through an unpopular austerity program that has cut fuel subsidies, raised taxes and sent utility bills soaring. But a poll out this week had a particularly worrisome number that could spell trouble for Macri’s hopes to squeeze additional budget cuts through Congress and win what promises to a be hard-fought re-election campaign next year. The survey of 2,400 Argentines by local firm Management & Fit showed that for the first time since Macri romped ...

Three days before U.S. President Donald Trump took office in January 2017, Chinese President Xi Jinping portrayed Beijing as the champion and defender of globalisation at the Davos World Economic Forum amid rising fears of trade protectionism. A few months later, as Xi launched a forum on China’s vast Belt and Road effort, promising to spread Chinese investment and soft power through the world, it appeared his country’s global stature was rising. But now the lustre on Beijing’s trade and investment story has dulled amid rising U.S. tariffs, higher interest ...

Italy should abide by European budget rules and must settle its differences with Brussels over higher state spending in talks with the European Union’s executive, a senior International Monetary Fund official was quoted as saying. The comments by the IMF’s First Deputy Managing Director David Lipton to German business daily Handelsblatt came after European Central Bank President Mario Draghi urged Italian officials to stop questioning the euro. “In our view, the Italian government should abide by the European rules and agreements,” Lipton said in an interview. “The discussions on the ...

Policy makers should prepare for more market volatility amid further financial tightening and “choppy” waters in the global economy stemming from trade tensions, said Christine Lagarde, managing director of the International Monetary Fund. The fund’s advice to central bankers and finance chiefs is to continue building monetary and fiscal buffers for the risks ahead, she said in an interview Sunday with Bloomberg Television’s Haslinda Amin, at the conclusion of the IMF and World Bank meetings in Bali, Indonesia. “Now is not the time to say, OK, fine, let’s just relax ...

Attempts by the US to isolate China from much of the international trading system by concluding restrictive trade deals with its major trading partners would harm the global economy, the IMF’s top official in Asia has warned. Changyong Rhee, head of its Asia and Pacific department, said on Friday that China is already integrated into the world economy, “and is basically too big,” for any such a plan to work. “The US and China have to talk” to resolve their disagreements, he stressed in an exclusive interview with South China ...

Italy must respect European Union budget rules with its 2019 budget and improve public finances if it wants to create headroom to loosen fiscal policy during the next economic downturn, a top International Monetary Fund official said. Poul Thomsen, the head of the IMF’s European department, told a news conference on Friday that Rome was wrong to target an increase in its headline and structural budget deficit next year in breach of EU budget rules. “We still project relatively strong growth in Italy next year. This is not the time ...

Sustained trade tensions could slash Asia’s economic growth by up to 0.9 percentage point in coming years, the International Monetary Fund said, urging policymakers in the region to liberalise markets to offset the fall in export sales. The IMF also warned in its twice-yearly report on the Asia Pacific region that the market rout seen in emerging economies could worsen if the U.S. Federal Reserve and other major central banks tightened monetary policy more quickly than expected. “Turmoil already seen in some emerging market economies could worsen, with negative spillovers ...

International Monetary Fund Managing Director Christine Lagarde warned countries against engaging in trade and currency wars that hurt global growth and imperil “innocent bystanders.” Formally launching the IMF and World Bank annual meetings on the Indonesian resort island of Bali, Lagarde urged countries to “de-escalate” trade conflicts and fix global trading rules instead of abandoning them. The United States and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months, rattling financial markets as investors worry that the escalating trade ...

Risks to the global financial system have risen over the past six months and could increase sharply if pressures in emerging markets escalate or global trade relations deteriorate further, the International Monetary Fund said. The IMF, whose autumn meetings with the World Bank get under way on the Indonesian resort island of Bali this week, also noted that while the banking system has been shored up by regulators in the decade since the 2008 global financial crisis, easy financial conditions are contributing to a buildup of vulnerabilities such as high ...

A new study by the International Monetary Fund projects emerging economies will muddle through recent market turbulence without a severe shock to their financial systems, but flags an outside chance of a crisis. A few countries, such as Argentina, are expected to suffer contractions. But most will continue to experience growth, despite sometimes drastic declines in their currencies, the IMF said in its Financial Stability Report, released at its annual meetings in Indonesia. In a “severely adverse” scenario, the IMF says capital could flood out of countries at a pace ...