BI Hopes IMF-World Bank Annual Meetings Can Calm Trade War Fears

Suci Sedya Utami    •    09 Oktober 2018 14:42 WIB
global economy (en)
BI Hopes IMF-World Bank Annual Meetings Can Calm Trade War Fears
Illustration (Photo:MI/Usman)

Bali: Bank Indonesia (BI) hopes that the IMF-World Bank Annual Meetings can find solutions to address negative impacts of the ongoing trade wars.

"We will have a session on global economy. United States representatives will explain the economic situation in their country," BI's Economic and Monetary Policy Department head Aida Budiman told Metro TV on Tuesday.

IMF earlier cut its forecast of global growth by two-tenths to 3.7 percent for 2018 and 2019. It also projected slower trade growths amid trade disputes between the United States and other countries.

"Growth in the United States, buoyed by a procyclical fiscal package, continues at a robust pace and is driving US interest rates higher. But US growth will decline once parts of its fiscal stimulus go into reverse. Notwithstanding the present demand momentum, we have downgraded our 2019 US growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China’s retaliation," IMF Chief Economist Maurice Obstfeld told reporters earlier today.

"China’s expected 2019 growth is also marked down. Domestic Chinese policies are likely to prevent an even larger growth decline than the one we project, but at the cost of prolonging internal financial imbalances," the IMF official said during the World Economic Outlook press briefing in Bali.

The Annual Meetings will take place in the holiday island of Bali for a week until October 14. The Indonesian government has registered around 34 thousand participants representing governments, international organizations, media and civil society groups.

"Overall, compared with six months ago, projected 2018–19 growth in advanced economies is 0.1 percentage point lower, including downgrades for the euro area, the United Kingdom, and Korea," Obstfeld added.

The negative revisions for emerging market and developing economies are more severe, at -0.2 and -0.4 percentage point, respectively, for this year and next year," he stated.