IMF sees solid near-term global growth but risks beyond
In the latest update to its World Economic Outlook, the IMF still predicts world growth of 3.9 per cent in 2018 and 2019.
Read more at https://www.channelnewsasia.com/news/world/imf-sees-solid-near-term-global-growth-but-risks-beyond-10147850
18 Apr 2018 12:07AM
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However, the Fund cautions that the growth "momentum is not assured," given trade tensions between the United States and China and the expected reversal of the positive effects from the US tax cuts.
However, Obstfeld warned the stimulus was "largely temporary."
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expected reversal of the positive effects from the US tax cuts - is the "Boom and Bust" phenomenon ---- Posted on :- 30 Nov 2017
It is thus important to watch out for Trump's "Boom and Bust" budget, fiscal policies (or his "Economic Yo-Yo" policies) - that artificially inflate economic growth (causing a spiking "Boom" for immediate gratification to his voters --- but will cause a sharp correction in the near term causing a sharp downturn correction - a "Bust" --- that will cause US recession --- and have the impact of pulling down the World Economy --- triggering a World Recession --- like in the past.
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While it is difficult to predict how things will play out, "I suspect if you keep poking at economic expansion it could turn around and bite you," Obstfeld warned.
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Don't deal with a Devil because a Devil will turn around and bite you. - Posted on 13 Apr 2018.
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"That major economies are flirting with trade war at a time of widespread economic expansion may seem paradoxical - especially when the expansion is so reliant on investment and trade," Obstfeld said.
"Our strong message at this meeting is there is a multilateral system. Let's use it and proceed in a collaborative way rather than conflictive way."
IMF chief Christine Lagarde last week warned governments to "steer clear of protectionism in all its forms," saying the trade frictions hurt poor consumers the most as costs increase, and that they also undermined a system that had broadened prosperity worldwide.
Rather than lower the trade deficit, as Trump has called for, the US trade actions could expand it by another US$150 billion by 2019, according to the report.
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It is very evident that Trump and his economic team - by harping on the trade deficit and fighting a trade war ---- is in fact barking on the wrong tree.
Trade (whether surplus and deficit) - should not be focus point - because trade bring the most cost effective resources, most cost effective products and services ==== which benefit worldwide businesses and consumers (including US businesses and consumers).
Trump and his economic team by forcibly intervene in the trade mechanism - are in fact doing US businesses and consumers a disfavor - because it force up prices in materials, resources and finished goods and services - by pulling out efficient global supply chain ---- into an inefficient and cost ineffective supply chain that distort the whole market mechanism and trade mechanism.
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Instead, the IMF argues that the United States and others should respond to anxiety about globalisation and technological advances by "strengthening growth, spreading its benefits more widely, (and) broadening economic opportunity through investments in people," Obstfeld said.
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This is in effect the right solution - to bolster growth, enhance business activities and people trained in skills that can helped them secured jobs.
Trump fail to focus on the above right antidote and right medicine - that is constructive and boost economic growth.
Trump instead go on a destructive path of confrontiation, conflict through trade war -- that is using wrong medicine, wrong antidote - which is destructive and cause economic growth to falter.
Thus Trump negative traits - has permeate negative energy throughout the World.
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