IMF in Bali to focus on global economic tremors
BALI: The International Monetary Fund holds its annual meeting this week in earthquake-stricken Indonesia, as it shines a light on tremors in the global economy.
Finance ministers and central bankers from 180 nations will be among 32,000 attendees in Bali for the annual meeting of the IMF and World Bank, which takes place every three years outside of Washington.
The gathering will be held from tomorrow to Sunday.
Bali is 1,125km from Palu, the city on Sulawesi wrecked by an earthquake and tsunami on Sept 28 that left more than 1,600 dead and thousands missing.
But the focus of the meeting is averting economic rather than natural disasters.
Like the Organisation for Economic Cooperation and Development, which lowered its economic growth forecast for the world economy to 3.7 per cent for this year, IMF chief Christine Lagarde signalled the fund would cut the outlook, which in July stood at 3.9 per cent.
Ms Lagarde said "some of those risks have begun to materialise" and "there are signs that global growth has plateaued". The rise in trade barriers is slowing trade and dampening investment and manufacturing as uncertainty increases. She repeated the warning about rising debt levels, which "reached an all-time high of US$182 trillion (S$252 trillion) - almost 60 per cent higher than in 2007".
That creates concerns for emerging market economies that will come under more pressure as the US central bank raises interest rates, while investors are likely to pull out of those markets seeking higher returns.
Argentina and Turkey already have been hit by headwinds, seeing their currencies collapse and forcing Buenos Aires to go the IMF for help.
The fund increased support for Argentina by US$7 billion in exchange for tough economic policy reforms, although the loan has not yet been approved by the IMF board.
Economist Monica de Bolle of the Peterson Institute for International Economics said Brazil also was likely to see market turbulence next year and South Africa is vulnerable as well.
"This is not going to end well," she said of the emerging market outlook. - AFP
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