World growth outlook dimming as trade war escalates: Lagarde

Bloomberg

The International Monetary Fund (IMF) is poised to cut its forecast for global growth as Managing Director Christine Lagarde warns trade wars and tighter credit are darkening the outlook.
Three months since predicting the world economy would grow 3.9 percent this year and next, Lagarde signaled in Washington that she is no longer quite so optimistic. The fund will update its World Economic Outlook on October 9 ahead of opening its annual meeting in Bali, Indonesia.
“Six months ago, I pointed to clouds of risk on the horizon,” Lagarde said. “Today, some of those risks have begun to materialise.”
While Lagarde acknowledged the global expansion is still the fastest in seven years, recent data suggest a cooling.
Lagarde said protectionist rhetoric was turning into “actual trade barriers,” spreading uncertainty among businesses and consumers. A strengthening US dollar and tightening financial conditions have increased challenges for many emerging markets, she said.
Lagarde called on countries to resolve their trade disputes, warning that the fracture of corporate supply chains could have “devastating” effects. “History shows that, while it is tempting to sail alone, countries must resist the siren call of self-sufficiency — because as the Greek legends tell us, that leads to shipwreck,” she said, without naming countries that are putting up new barriers.
Finance ministers from the Fund’s 189 members nations will convene next week in Indonesia hoping to find common ground on trade — a challenging task since Trump took office, promising to rip up trade deals he views as unfair and promote an “America First”
approach to foreign policy.