IMF’s Lagarde Says US Rates and China Could Trigger Vicious Cycle

The head of the International Monetary Fund has warned global growth is likely to be weaker this year than last.

Christine Lagarde also said she expected there would be only a modest acceleration in 2016.
And she warned there could be an economic “vicious cycle” caused by higher US interest rates and the Chinese slowdown.

She said these threats could jeopardise recent economic gains in Asia, Latin America and Asia.
Ms Lagarde was addressing the Council of the Americas ahead of next week’s IMF and World Bank annual meetings and the release of the Fund’s World Economic Outlook on Tuesday.

She said: “The good news is that we are seeing a modest pickup in advanced economies. The moderate recovery is strengthening in the euro Area; Japan is returning to positive growth; and activity remains robust in the US and the UK as well.

“The not-so-good news is that emerging economies are likely to see their fifth consecutive year of declining rates of growth.”

Via BBC News

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza