The Global Economy: A Delicate Moment

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Round. These parts we spell global economic forecast with three little letters. I m end ETF from American public media. This is marketplace. In Los Angeles. I'm KAI Ryssdal. It is Tuesday the ninth of April today. Good as always to have you along everybody, we begin on this Tuesday with a restatement of our every now, and then observation that this is a global economy, and we are kind of stuck with it. Come. What may and when what is coming is generally good rising growth in economic optimism. Good fine. When what's coming is less growth in some small degree of economic pessimism. Well, you got to play the Hendra Dell. Right. And the global economic hand we are being dealt today comes to us from the International Monetary Fund. I m f get it which is out with its latest forecast on the global economy growth. Yes. But less of it the IMF third forecast of slower growth in six months. Gita Gopinath is the chief economist for the IMF, Dr Gopinath welcome to the program. Thank you. You called the global economy this morning, some of your commentary. You said we're at a delicate moment how come why said global growth is projected slowdown. Down to three point three percent and twenty nineteen and we expect recovering twenty twenty and you know, that recoveries precarious. So that's the sense in which this is a delicate moment because if any of the downside Ristori worry about materialize, the recovery that we're expecting may not come about. Okay. Why are you expecting recovery? If it's if it's precarious seems like a gutsy call the make well, we certainly seen as a substantial amount of policy accommodation around the world. I mean, all of the major central banks have shifted to a more accommodative stands we've seen China. Putin affair amount of fiscal and monetary stimulus. We certainly seen some improvement in trade tensions between US and China at least compared to twenty eighteen so all of those factors, you know, would help a growth going forward, and we expect to see some recovery's stressed economies like Argentina and Turkey. So that's where our focus is coming from got low rates, the accommodative policy that you mentioned, but we do still have the specter of a no deal, Brexit or whatever's going. To happen over there. We have ongoing U S China trade talks, which again who knows what's gonna happen over there. Get me, then to your to your downside risk that you mentioned. I mean, I'm unavo- main downside risk remains an esscalation intrigue tensions. You know, maybe with other countries in other sectors like autos, we would like to see a resolution of Brexit with an agreement. That's not an audio Brexit. I mean, these would be some of the important policy missteps to be awarded. Let me get a little more specific. Are you talking American trade policy movements here we are talking about? Yes. The US China trade tensions weaken growth weakened investment, reduced business confidence. So the question is what happens going forward from the US side from any retaliation. Which is why we, you know, we we say that this is a delicate moment in his appoint for policy makers to avoid missteps, let me just ask. Since you mentioned central banks and listeners will hair elsewhere in the program about about the impedance of central banks. And since you led with it in your answer. How critical are central banks and the proper functioning there of to the to the future health of a global economy. I mean, central Bank policies of all these taken recently the independence of the central Bank are all hugely important for the health of the global economy. They played an important role in reducing downside risks that were showing up towards the end of twenty eighteen and so it is important that they remain independent their mandate a driven and the the policies are well communicated. So we've been on the job since the first of January, how're you liking it so far it's been it's been a lot of fun. It's been great. Doc to choose the new ish chief economist at the International Monetary Fund out with your global forecast this morning, Dr Goldman now, thanks for your time. I appreciate it. Thank you so much.

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