FUKUOKA, Japan – The head of the International Monetary Fund warned on Saturday that trade breaks could undermine the global economy, which is expected to slow this year.
"We believe the risks are downside and clearly downturned Trade tensions are a significant risk on the horizon," said IMF Managing Director Christine Lagarde in an interview with the Nikkei Group media.
Although there are other potential risks, including geopolitical uncertainties, "we see the biggest ones right now are trade tensions," said Lagarde, who attended a two-day meeting of 20 finance ministers and central bank chiefs in Fukuoka.
The IMF forecasts that global economic growth will slow from 3.3% this year to 3.3%. last year. Growth is expected to accelerate in the second half of the year, returning to 3.6% in 2020.
The outlook would improve if trade-related risks were eliminated "as the parties decided to agree to eliminate and replace tensions. This uncertainty [with a] is based on rules that are mutually beneficial", said Lagarde.
Lagarde did not mention the US-China trade war nor did she comment at length on the decision by US President Donald Trump to withhold his threats of additional tariffs on Mexican exports.
"Obviously, we have always supported the principle that trade is an engine for growth," Lagarde said. "To the extent that there is sustainable predictability and security and no tariffs, this is a good development."
Negotiations between the US and China were aborted last month, and both sides are unlikely to advance ahead of Trump and President Xi Jinping will attend the G-20 summit in Osaka later this month, US Treasury Secretary Steven Mnuchin on Saturday in Fukuoka.
When Lagarde was asked about financial technology at the G-20 meeting, he pointed to the Southwest, the emerging tech industry of the Japanese city.
"Since Fukuoka has so many startups where there are a lot of developments in digital techniques, it is very appropriate that we discuss these issues here." At TV Tokyo and Nikkei Business Publications, Lagarde called for further progress in reducing gender inequity in the Japanese business community.
"I would very much like to brainwash some of these executives so they can finally understand that involving women in the workforce, especially very talented Japanese women, would actually improve the bottom line," she said.
On Prime Minister Shinzo Abe's Efforts to Encourage the Inclusion of Women in the Workforce She said: "When I see that the Japanese budget provides for the creation and support of day care, I welcome.
" I hope that this movement will continue because there is an unused resource in the Japanese community, namely women. "