IMF chief urges governments to avoid wrong trade policies

"We know that, for many decades, trade integration has helped boost productivity, innovation, growth, employment, and has reduced the cost of living, particularly for the low-income people," IMF managing director Christine Lagarde said in a press conference at the Spring Meetings of the IMF and the World Bank.

"We need to better address dislocations caused by trade and by technological innovation, however intertwined they are. And we need to do more for those who are left behind," Lagarde said.

The IMF chief called on countries to better address unfair trade practices, including through a World Trade Organization system reform. "And we need to avoid self-inflicted wounds, including tariffs and other barriers," she continued.

Lagarde also urged countries to create more fiscal space in order to "resist the next crisis" when downturn comes up, and suggested policy makers enhance international cooperation on issues such as corporate taxation and corruption.

The IMF on Tuesday lowered its global growth forecast for 2019 to 3.3 per cent in the newly-released World Economic Outlook (WEO) report, down 0.2 percentage point from its estimation in January.

The IMF now expects 70 per cent of the global economy to experience a slowdown in growth in 2019, whereas just two years ago, 75 per cent of the global economy experienced synchronized growth acceleration, Lagarde said.

The WEO report also cautioned about downside risks, which include trade tensions, no-deal Brexit, and significant financial vulnerabilities associated with large private and public sector debt in several countries.