Global finance officials pledge to tackle economic slowdown

The IMF’s steering committee said all members, in order to protect the current economic expansion, would “act promptly to shore up growth for the benefit of all.” (Pexels Photo)

WASHINGTON – Global finance officials are pledging closer co-operation in efforts to lift the world economy out its current slowdown, but tensions persist on a number of fronts between the United States and other nations over trade and other issues.

Officials wrapped up the spring meetings of the 189-nation International Monetary Fund and the World Bank on Saturday, expressing hope the slowdown that began last year will be followed by stronger growth in the second half of this year and into 2020.

The IMF’s steering committee said all members, in order to protect the current economic expansion, would “act promptly to shore up growth for the benefit of all.”

At a closing news conference, the committee chairman, Lesetja Kganyuago, head of the central bank of South Africa, said every country needs to be ready to address issues involving financial stability “with all available tools.”

Many nations were jolted last year when stock markets went into a nosedive, reversed only when major central banks, including the Federal Reserve, halted efforts to tighten credit policies.

Separately, Treasury Secretary Steven Mnuchin told reporters that both the United States and China were moving closer to an agreement on trade. The trade war between the world’s two biggest economies and the punitive tariffs each nation has imposed on the other raised widespread concerns during the talks.

Mnuchin said he had told the other finance officials that the negotiations were making progress but he would not disclose a timeframe for when they might be wrapped up. He said both sides had conducted phone discussions over the past week and he wasn’t certain whether more face-to-face meetings would be needed.

“If we are able to conclude this, it will be the most significant change in 20 years” in the economic relations between the two nations, Mnuchin said.

He said that the proposed agreement the two sides are working on has seven chapters and includes language that will allow both countries to set up enforcement offices to make sure the deal is followed.

In remarks to the World Bank’s steering committee on Saturday, Mnuchin said the U.S. was encouraged that the bank’s private sector lending operation wanted to step up support for nations “affected by fragility, conflict and violence.” But he said World Bank officials must ensure such support is aimed at boosting effective private investments in poor countries.

David Malpass, a longtime World Bank critic, took over as president of the bank on Tuesday with the backing of the administration. President Donald Trump said in a newly published interview that he had considered his daughter Ivanka, a White House adviser, for the job.

“She would have been great at that because she’s very good with numbers. She’s got a great calmness. … I’ve seen her under tremendous stress and pressure,” he was quoted as telling The Atlantic.

When Jim Yong Kim resigned suddenly as bank president earlier this year, reports said that Ivanka Trump along with Malpass were being considered for the job, which has always gone to an American.

Before the meetings of the policy-setting panels of the IMF and World Bank, finance ministers and central bank presidents of the Group of 20 major economies held discussions Thursday and Friday.

G-20 officials agreed with a downgraded IMF forecast released this week. It predicted global growth would be 3.3% this year, the slowest since the Great Recession ended in 2009, but would regain momentum and advance to growth of 3.6% in 2020.

Officials cautioned that a trade standoff between the United States and China threatens to dim the economic outlook.

The U.S. and China have imposed tariffs on $350 billion worth of each other’s goods. They are battling over U.S. allegations that China deploys predatory tactics – including cybertheft and forcing foreign firms to hand over trade secrets – in a sharp-elbowed effort to challenge American technological dominance.

Financial markets have rallied this year on hopes that the two countries will reach a settlement.