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WORLDBANK-IMF-ECONOMY-MNUCHIN
At IMF, US urges action to spur global economy; avoids talk of trade war
WASHINGTON, Oct 19, 2019 (BSS/AFP) – Washington called Friday for action
from other major world powers to spur economic growth, avoiding mention of
the US-China trade war and blaming the current global slowdown on excess
savings, flagging investment in China and Europe in particular.
In a statement at the conclusion of annual meetings by the World Bank and
International Monetary Fund, US Treasury Secretary Steven Mnuchin said the US
economy stands out on the world stage and is primed for faster growth thanks
to the tax cuts and regulatory reforms championed by President Donald Trump.
Mnuchin’s remarks ran counter to urgent warnings this week from the IMF,
which said the US-China trade war would shave 0.8 percent from the world
economy next year alone and was eating into business investment in the United
States.
While the IMF has likewise called for greater stimulus, it also downgraded
its global economic forecasts for the fourth straight quarter, citing Trump’s
trade wars as a principal cause of weakness.
According to Mnuchin, if world governments take no action, the slowdown in
China, Germany and Europe “could prove longer or deeper than initially
envisioned.”
He said there was “ample space for tax cuts and other fiscal measures” to
spur a rebound in economic activity.
“Moreover, weak demand and subdued real interest rates across the global
economy are symptoms of the substantial excess saving that is not being
productively employed within the domestic economies of China, Germany, the
Netherlands and other major economies,” Mnuchin said.
China on Friday reported its slowest GDP growth in 27 years.
While the United States has outshined other industrialized economies this
year, there are increasing signs that Trump’s trade wars have wounded
American industries, with manufacturing and agriculture badly damaged,
exports weakening and investments by businesses sharply curtailed.
Policymakers at the Federal Reserve believe they have raised the chances
of a recession and could slow job growth, thereby eating into consumer
spending and weighing on economic expansion, currently on its longest streak
in US history.
BSS/AFP/HR/0920