The International Monetary Fund has warned about continued uncertainty surrounding Brexit, despite a deal to extend negotiations. The future of the U.K.’s relationship with the European Union was one reason the IMF has downgraded global economic growth this week. But if the extension brought relief, the U.K. isn’t the only flashpoint. How both the IMF and World Bank respond to the Venezuela leadership crisis remains unresolved.
CGTN’s Owen Fairclough has more.
Spring may be in the air at the International Monetary Fund.
But it hasn’t been a happy week for an organization that’s had to downgrade last year’s optimistic forecasts.
“The global economy is also currently quite uncertain,” IMF Managing Director Christine Lagarde told a news conference in Washington D.C. “As I said a year ago, we were talking about synchronized growth. And 75 percent of the global economy was going through that phase. As you heard a couple of days ago, we’re now talking about synchronized slowdown by 70 percent of the global economy.”
But at least one major concern — Britain crashing out of the European Union without agreed terms for trade, with an extension to negotiate a potentially softer Brexit.
But Lagarde still has concerns, adding: “It’s obvious that it’s continued uncertainty and it does not resolve other than by postponing what would have been a terrible outcome, because we believe that – in terms of economic consequences – the no-deal Brexit would have been a terrible outcome.”
If Brexit is about putting on a brave face, the World Bank has been welcoming a fresh one.
New World Bank President David Malpass made his first public appearance, setting out his priorities.
“Venezuela is of deep concern, I think to all of us, and to the World Bank,” Malpass told a World Bank news conference. “It’s a humanitarian crisis.”
But trying to solve that with aid is sensitive for both the IMF and World Bank. They’ve yet to decide whether to follow Western governments in recognizing opposition leader Juan Guaido as president, instead of Nicolas Maduro, who has retaliated against economic sanctions by blocking aid.
“As far as the political side of it, we will be guided by the international community and the views of our shareholders on that matter. And, so this is something that is not chosen by the bank but by the shareholders of the bank,” Malpass said.
It’s a discussion the Trump administration will want to influence.
Malpass was Trump’s choice to run the World Bank and the U.S. has the most voting power there and at the IMF.