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Lagarde warns of a potential economic storm hovering over the global economy

Christine Lagarde, the International Monetary Fund Managing Director, said that global economy is growing more slowly than expected. She warned of a possible economic storm due to global economy deceleration.

In the World Government Summit in Dubai yesterday (Sunday), Lagarde said: “We see an economy that is growing more slowly than we had anticipated”

The IMF has lowered its forecast for global growth rate last month, for the second time in months, to be 3.5 percent for this year after being 3.7 in 2018. The IMF also lowered its growth estimate for 2020 to become 3.6 percent, down 0.1 percent. Lagarde mentioned what she described as “the four clouds” undermining global economy, and warned of a potential storm strike.

According to Lagarde’s warning, there are a lot of factors contributed to slow down of global economy rate, including trade tensions, tariffs, and fiscal tightening. In addition to uncertainty about “Brexit” outcome and deceleration of Chinese economy.

Shed added that trade spats between the United States and China affect the world already. And she said: “We have no idea how it is going to pan out what we know is that it is already beginning to have an effect on trade, on confidence and on markets” The IMF MD warned that fiscal tightening is posed within a context of “heavy debt” racked up by governments, firms and households. She said: “When there are too many clouds, it takes one lightning to start the storm”.