Business

Trump may be good for US economy but not for world: IMF

DUBAI: International Monetary Fund (IMF) chief Christine Lagarde yesterday voiced optimism for US economic growth under President Donald Trump but warned it could herald trouble for the rest of the world.

"From the little we know, and I will insist on the little we know, because this is really work in progress... but from the little we hear, we have reasons to be optimistic about economic growth in the US," Ms Lagarde said at the annual World Government Summit in Dubai.

She predicted tax reform and investment in infrastructure were likely under Mr Trump.

The Dow, Nasdaq and S&P 500 all closed up 0.6 per cent on Thursday after the new US president promised to unveil a "phenomenal" tax cut plan within two or three weeks.

Yet the IMF chief did not mince words in her concerns over the global repercussions of a boon in the US economy.

Said Ms Lagarde: "The more worrying news is that it will have consequences on the rest of the world, and we are seeing it."

She highlighted the strength of the dollar against other currencies, predicting a hike in interest rates regulated by the US Federal Reserve.

"That's a tightening that will be difficult on the global economy and for which economies will have to prepare."

Last month, the IMF raised the US growth estimate a tenth of a point this year to 2.3 per cent, and four-tenths of a point to 2.5 percent for next year.The World Bank has not changed its forecasts for the United States.

The two organisations are expected to announce clearer forecasts in April.- AFP

IMFunited statesEconomy