IMF sees a debilitated world in face of upcoming crisis

The first deputy managing director of the International Monetary Fund (IMF), David Lipton, yesterday warned that turmoil is coming to the global economy and that central banks are not well enough prepared to deal with them. The IMF has urged governments to take advantage of the last two years of relative boom to reform and protect themselves from new mishaps, Lipton explained during a conference organised by the Bloomberg economic agency.

“But I, like many of you, see that clouds are forming and fear that the work done to prevent crises is incomplete.” “We cannot expect governments to have the room for manoeuvre that they had ten years ago to respond to the recession,” said Christine Lagarde’s number two, who urged governments to cooperate to solve the problems that could lead to a new crisis.

However, the IMF also warned that the most immediate risk is the trade war between the US and China, and in that regard, it requested that the truce agreed between the two economic giants during the recent G20 Summit in Buenos Aires lead to a “lasting agreement that avoids an intensification or extension of tensions,” Lipton said.

Otherwise, he warned, there is a risk of “fragmentation” in the world economy and a new recession.