NUR-SULTAN – International Monetary Fund Managing Director Christine Lagarde said on Thursday that the IMF was confident trade tensions among the world’s leading economies, notably the United States and China, will abate over the next six months.
Lagarde spoke at the Astana Economic Forum in Nur-Sultan, the Kazakh capital, Nur-Sultan.
“Any trade war affects those that participate and those that don’t,” she said, adding, “no one wins.”
The dispute between Washington and Beijing began in 2018, when US President Donald Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports.
China responded with identical duties on $60 billion in US products.
Last week, even as US and Chinese negotiators were meeting in Washington, Trump increased the tariffs from 10 percent to 25 percent. Beijing reciprocated on Monday, prompting Trump to threaten to impose duties on virtually all Chinese imports.
The trade friction has spurred doubts about prospect for the global economy.
In its latest economic forecast, issued last month, the IMF lowered its projection for growth in 2019 from 3.5 percent to 3.3 percent, compared with 3.6 percent last year.
Lagarde said the IMF expects growth to return to an annual pace of 3.6 percent in 2020, while calling on governments to create suitable economic conditions “without tightening the financial belt and creating additional risks.”
The IMF chief urged Kazakhstan and its Central Asian neighbors to strive for inclusive growth and said that region has the potential to increase the median annual rate of expansion from 3.3 percent to 4.1 percent.
She noted that only 45 percent of adults in the countries of the Caucasus and Central Asia have bank accounts, which is “almost 20 percent less than in other countries with developing markets.”
“If the countries of Central Asia take advantage of the possibilities of modern financial technologies, as did other developing economies, the situation for the poor, women and young people will improve,” Lagarde said.
If Central Asian countries commit to developing their transportation infrastructure, she said, they can return to the glorious times of the Great Silk Route, which enabled “this part of the world to become a hub for global trade and learning.”