Trade Key Global Growth Risk, Recession Unlikely

Trade Key Global Growth Risk, Recession Unlikely

Incoming ECB President Christine Lagarde said the global economy is likely to dodge an outright contraction, though the trade tensions remain the Key threat to the growth outlook.

It is not in the baseline to have a recession,” Ms. Lagarde said in a TV interview Tuesday. “That said, it’s mediocre growth, it’s at risk because of essentially one major threat, which is the trade war that we see developing or brewing and the uncertainty it generates for investors.

The comments from the former IMF leader come as she prepares to take the helm of the ECB at a precarious time for Europe and the global economy alike, as well as growing divisions inside the central bank.

The IMF has made a series of cuts to its global growth estimate for this year, cutting it to 3.2% in July, which would be the weakest pace since the financial crisis. The fund will released updated economic projections next month.

In what could be seen as a warning to future colleagues unhappy with the direction the ECB has taken under President Mario Draghi, Ms. Lagarde said the 1 word of advice she would take with her is “teamwork.”

She said that at the IMF, officials could disagree but once a decision is taken, they all moved together.

“There’s such a strong and intelligent and powerful staff within the institution that I will get the right support, the right expertise,” Ms. Lagarde said.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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