October 1, 2018 / 3:04 PM / 2 months ago

IMF's Lagarde warns trade conflicts dimming global growth outlook

WASHINGTON, Oct 1 (Reuters) - International Monetary Fund Managing Director Christine Lagarde said on Monday that trade disputes and tariffs are starting to dim the outlook for global growth, calling on countries to resolve their differences and reform global trading rules.

Lagarde, in a speech ahead of the IMF and World Bank’s annual meetings next week in Indonesia, said growth was at its highest level since 2011, but had plateaued, with fewer countries participating in the expansion.

“In July, we projected 3.9 percent global growth for 2018 and 2019. The outlook has since become less bright, as you will see from our updated forecast next week,” Lagarde said, without providing new figures.

“A key issue is that rhetoric is morphing into a new reality of actual trade barriers. This is hurting not only trade itself, but also investment and manufacturing as uncertainty continues to rise,” she added.

While the United States is growing strongly because of tax cuts and easy financial conditions, there are signs of slowing in the euro area and Japan, she said. China is also showing signs of growth moderation, a trend that will be exacerbated by its trade disputes with the United States, which has imposed tariffs on $250 billion worth of imports from China and is threatening duties on $267 billion more. (Reporting by David Lawder Editing by Chizu Nomiyama)

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