The International Monetary Fund’s role as a promoter of global cooperation faces its biggest test in a decade as the 189-nation organization meets in Washington this week to wrestle with how to heal a world economy fractured by trade disputes.
We already know the IMF is set Tuesday to slash its 2019 global growth forecast for the fifth straight time - each for the same reason. Tariffs and other implements of trade combat are taking their toll on everyone from farmers to manufacturers and in economies across the globe - not just the U.S. and China.
The fund has been warning if the situation worsens that coordinated fiscal action (code words for government spending and other public assistance) will be required. We may learn more this week if central bankers and finance ministers could work together on a policy response like they did in 2009. That’s a tough sell in an environment where protectionism has been embraced by leaders like U.S. President Donald Trump.
Not even last week's trade breakthrough with China will offer solace for economy watchers because the details of the so-called Phase One agreement are still sketchy. Beijing is suggesting it may need more time to negotiate an accord, even as the Trump administration suggests an deal could be signed with Chinese President Xi Jinping at APEC in November. High levels of uncertainty remain.
Here are a few other things to watch for at this week's annual IMF and World Bank meetings:
Tuesday: The IMF will publish its updated growth forecasts in the World Economic Outlook. We'll find out how deeply they plan to cut the forecast for this year and next, and which nations are hurting the most.
Wednesday: Reda Cherif and Hector Perez-Saiz of the the fund's Africa department will talk on a panel about whether the African Continental Free Trade Agreement will be a game-changer for the continent.
Thursday: World Bank Chief Economist Penny Goldberg and Finnish Foreign Trade Minister Ville Skinnar will talk about whether global value chains, trade and development are coming to the end of an era. Also on Thursday, World Bank President David Malpass and IMF Managing Director Kristalina Georgieva will deliver their opening remarks in which trade will no doubt feature prominently.
Friday: Officials from the Group of 20 will speak to reporters about the state of their economies.
