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Christine Lagarde cut forecast about economic growth

This Wednesday IMF Chief Christine Lagarde expressed unsatisfactory outlooks about global economy. Emerging markets and China’s problems may restrict growth of global economy. IMF Chief thinks that 2016 will have smaller indexes of growth against 2015, and much smaller against 2015. Paces of development of emerging markets will be falling fifth year in a row.


IMF is going to cut assessments of global economy at annual meeting of financial ministers and central banks’ governors that will be held next week in Lima.


In July this forecast has been cut to 3.3% from previous 3.5%. Global GDP can show growth to 3.8% in 2016, but China’s recession caused fall of emerging economies and decline of raw material prices.  This situation is very risky for economies of leading countries.


Despite the fact, that the US economic recovery strengthens, the Eurozone and Japan have positive indexes, demand on leading countries is weak to prevent slowing of emerging economies.


Central banks of emerging countries have used increase of currency reserves as a defense and let currencies soften negative way. Christine Lagarde expressed concerns about lack of defensive opportunities of these countries to prevent steadily to this shock. IMF reiterated disagreement with Fed’s decisions to tighten monetary policy this year. IMF asked not to perform this decision until 2016. Growing price of borrowings may cause growth of debt pressure and stagnations emerging economies. Systematically important central banks were recommended to reform and develop their policies, to consider more correctly current global situation during adaptation of some key decisions.