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Global economic ‘storm’ on horizon: IMF

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Governments around the world should prepare for a global economic “storm” as weak economic growth begins to pose a major threat, the International Monetary Fund has warned.

The IMF lowered its global economic growth forecast to 3.5 per cent from 3.7 per cent for this year in January.

And this weekend, the IMF managing director Christine Lagarde warned the sluggish growth continues to miss expectations, AFP reports.

“The bottom-line — we see an economy that is growing more slowly than we had anticipated,” she told the World Government Summit in Dubai.

‘Four clouds’

Lagarde said there are “four clouds” that signal a potential strike.

These are trade tensions and tariff escalations, Brexit uncertainty, an accelerated slowdown of the Chinese economy and financial tightening.

Speaking on Brexit, she warned that should the UK leave, the economy will never be as good as it is now.

“Whether it ends well, whether there is a smooth exit given by customs unions as predicted by some, or whether it’s as a result of a brutal exit on March 29 without extension of notice, it’s not going to be as good as it is now,” she said, warning all entities to “get ready for it”.

Trade tensions between the US and China are already taking effect, she added.

“We have no idea how it is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets,” she said.

“When there are too many clouds, it takes one lightning (bolt) to start the storm.”

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