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China not a trade villain, IMF says

China is not the villain in the global trading system that the Trump administration likes to portray it as, the International Monetary Fund said, in a new report released this week. After years when China ran a large current account surplus based on export-led growth, the IMF said that China’s current account deficit, the widest measure of China’s trade balance, its current account, was “broadly in line with fundamentals” in 2018. The country’s trade picture was helped by a massive increase in outbound tourism, that widened its deficit in services, ...

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Dijsselbloem Floated for Top IMF Job by the Dutch Government

The Dutch government is campaigning for former finance minister Jeroen Dijsselbloem to be the next managing director of the International Monetary Fund, according to a person familiar with the matter. The senior euro-area crisis veteran is one of a handful of names currently in discussion to preserve Europe’s traditional hold on the IMF role. Others include Bank of England Governor Mark Carney, Bank of Finland Governor Olli Rehn, Portuguese Finance Minister Mario Centeno, who chairs meetings of euro-area peers, and his Spanish counterpart, Nadia Calvino. Several possible candidates are already ...

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IMF recognizes progress in China’s external rebalancing

China’s current account surplus in 2018 narrowed further, as its external position was assessed to be in line with fundamentals and desirable policies, reflecting progress in rebalancing, the International Monetary Fund said on July 17. ‘A noteworthy development is the continued narrowing of China’s current account surplus against a backdrop of greater exchange rate flexibility and REER (real effective exchange rate) appreciation over the last decade,’ Gita Gopinath, IMF’s chief economist, said at a press conference. China’s current account surplus continued its decline in 2018, reaching 0.4 percent of GDP ...

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IMF must adapt to China’s rise, fintech, to stay relevant – Lipton

The International Monetary Fund must continue to adapt to rising economic powers such as China and new financial technologies to remain relevant in its next 75 years, the fund’s acting managing director said. David Lipton, speaking at a conference in Paris marking the 75th anniversary of the Bretton Woods institutions, said the IMF, dominated by the United States and European industrial powers since its inception, has a built-in duty to reflect the rising power of emerging markets. “The hubs of economic activity will shift over the coming decades. New financial ...

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IMF sees trade disputes slowing global trade, sees supply chain risks

The International Monetary Fund on Wednesday said global trade growth was slowing as a result of tensions between the United States and China and others, and prolonged uncertainty about tariffs was weighing on business sentiment around the world. IMF Chief Economist Gita Gopinath told reporters that disputes over trade and technology were clearly having a fundamental impact on global trade, and repeated the Fund’s estimate that the tariffs applied in the U.S.-China trade war could shave 0.5% off global economic growth in 2020. “There has been a decline in world ...

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IMF cuts forecast for Russian 2019 GDP growth to 1.2%, calls for reforms

The International Monetary Fund cut its forecast for Russian economic growth in 2019 to 1.2% from 1.4% after a weak first quarter, saying broader reforms would be needed for stronger growth. Without deeper structural reforms, long-term growth is projected to settle around 1.8%, the IMF said on Wednesday. Priority should be given to creating a more vibrant private sector and reducing the footprint of the state, it said. Russian President Vladimir Putin, after re-election last year, voted for massive spending on health, education and infrastructure – a move the IMF ...

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On Path to ECB, Lagarde Resigns as IMF’s Chief

Christine Lagarde submitted her formal resignation as managing director of the International Monetary Fund to prepare for the nomination process to be the next president of the European Central Bank and to allow the IMF to begin finding her successor. Ms. Lagarde was announced as the leading candidate for the ECB job two weeks ago, and had relinquished leadership of the IMF at that time, but she had not resigned. Her resignation will formally take effect Sept. 12. She announced her formal resignation in a statement Tuesday, saying “I have ...

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World economy needs to avoid ‘self-inflicted wounds,’ IMF says

The U.S. economy is performing well but it’s not immune from external challenges that could affect its success, the acting managing director of the International Monetary Fund (IMF) told CNBC. “No matter how you cut it, the U.S. economy is doing well and it’s doing well at a time when global trade is very slow,” David Lipton told CNBC’s “Street Signs.” But he added that there “are many events in the world that could affect the U.S. economy and it makes sense to be vigilant to all of those.” “We ...

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IMF cuts forecast for Singapore’s 2019 economic growth to 2%

The International Monetary Fund (IMF) has trimmed its 2019 economic growth forecast for Singapore to 2% from 2.3%, the Washington-based lender said on Tuesday, as global trade tensions hit exports from the city-state. Singapore’s economy grew just 0.1% in the second quarter, its slowest annual pace in a decade, raising bets of a recession and monetary policy easing. “Given global trade tensions, support from external sectors is expected to fall and growth drivers are projected to shift back to domestic demand,” the IMF said. “Risks to the outlook are tilted ...

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OECD employment rate increases to 68.7% in the first quarter of 2019

The OECD area employment rate – the share of the working-age population with jobs – increased by 0.1 percentage point in the first quarter of 2019, to 68.7%, driven entirely by an increase in the female employment rate (up 0.2 percentage point). Employment rates are well above previous peaks in the OECD area, the euro area and in most major OECD countries (Canada, France, Germany, Japan and the United Kingdom), but remain below the previous peak in the United States. In the euro area, the employment rate continued to increase ...

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The next Lagarde? Europe searches for one of its own to take the IMF job

The International Monetary Fund (IMF) will soon start the process of choosing a new managing director, with Christine Lagarde set to leave the organization in a few months’ time. EU ministers have made it clear they want to see someone from their continent take the job — which will be a five-year term — and continue the tradition of having a European at the helm of the Washington-based institution. Since the IMF’s formation back in 1945, the managing director has always been from Europe. “What we want in France is ...

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Demographic problems stifle growth, convergence in CEE countries – IMF

Rapidly shrinking and ageing populations in central and southeastern Europe could significantly hamper economic growth and convergence with more developed European economies, the International Monetary Fund (IMF) said on Monday. IMF deputy managing director Tao Zhang told a conference in Dubrovnik that the overall population of the region would decline 12 percent by 2050 due to ageing and migration, while the labour force was likely to fall 25 percent. He was referring to mostly European Union members and candidate countries who were formerly part of the communist bloc. Many workers ...

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Uncertain global economy should prompt governments to embark on reforms that boost sustainable growth, raise incomes and increase opportunities for all

Slow growth, high uncertainty and rising levels of inequality should prompt policy makers to take urgent action to achieve stronger, sustainable and more inclusive growth, according to the OECD’s annual Going for Growth report. Going for Growth 2019 points out that the weakening of growth comes at a time when globalisation, digitalisation, population ageing and environmental degradation are key forces shaping economic developments. To better manage these megatrends, governments must carefully select, prepare, prioritise and implement country-specific structural reforms that boost long-term growth, improve competitiveness and productivity, create jobs and ...

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Trade Balances Mostly Driven by Economic Forces, Not Tariffs

Over the past two decades, most of the changes in bilateral trade balances—the difference in the value of exports and imports between two countries—were explained by macroeconomic factors, according to IMF research. These factors include fiscal policy, demographics, and weak domestic demand. They may also include exchange rate policies and domestic supply-side policies, like subsidies to state-owned enterprises or to export sectors. In contrast, changes in tariffs played a much smaller role in influencing trade balances. Our chart of the week from the April World Economic Outlook quantifies the drivers ...

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IMF to ship $5.4 billion to Argentina under standby loan deal

The International Monetary Fund board said on Friday it would ship $5.4 billion (£4.3 billion) in cash to Argentina after approving a fourth review of a standby credit deal with the crisis-stricken South American nation. The latest instalment is part of a $57 billion IMF financing agreement approved last year that included unpopular spending cuts that have hammered households and businesses already struggling with recession and high inflation. “The Argentine authorities continue to show a strong commitment to their economic policy programme, meeting all the applicable targets under the Fund-supported ...

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