IMF: No elements of recession in near term

- AFP, WASHINGTON

Dec 9, 2018-

Despite some uncertainty and market volatility, the United States is not likely to see an economic contraction in the near term, IMF chief Christine Lagarde said on Thursday.

On a day when Wall Street dropped three percent before recovering some ground, Lagarde said “there’s a question mark about growth prospects going forward” but the concerns are “a little bit overdone.”

“I don’t see the elements of recession in short order,” she said on CNBC, and

the IMF is forecasting 3.7 percent global growth next year which “is not bad.”

However, she said the Federal Reserve was “probably going to slow down” its rate increases as they look at economic data.

The US central bank has raised its benchmark lending rate three times this year and is widely expected to do so again on December 19 but has signaled that it may slow or even pause next year as the economy loses some steam.

Lagarde declined to make a recommendation to Fed policymakers but said their moves would depend on “their reading of the state of the economy” and should be “well communicated” since US monetary policy has an impact on economies around the world.

Asked about the impact of the tariff battle between the United States and China, Lagarde said if it stopped now the direct hit to their economies would be “minimal.”

Published: 09-12-2018 08:00

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