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KT Edit: More cooperation is needed for global growth

Filed on January 21, 2019 | Last updated on January 21, 2019 at 09.02 pm

A 90-day truce between the economic powerhouses has helped but economists are not hopeful of a breakthrough. To make matters worse, US delegation is a no-show in Davos.

With world leaders gathering in picturesque Davos, the International Monetary Fund will release a sobering report on the slowing pace of global growth. The quarterly World Economic Outlook again highlights the sluggish pace of the world economy this year and the next. Barring a handful of large economies such as India and Japan, several countries will grow slower in 2019 and 2020. Last year's growth was pegged at 3.7 per cent. H

However, economic strains in the second half of 2018 are expected to continue in 2019 when it will slow to 3.5 per cent, before picking up a bit to 3.6 per cent in 2020. This is lower than what was predicted. The sticking issue is the US-China trade war and the ensuing stalemate. A 90-day truce between the economic powerhouses has helped but economists are not hopeful of a breakthrough. To make matters worse, US President Donald Trump's delegation is a no-show in Davos.

The Chinese economy, meanwhile, is showing signs of weakness and 6.6 per cent annual growth for 2018 is the slowest in the last three decades. The downturn has been sharper than expected and will have a ripple effect on the growth numbers of economies worldwide.

The Middle East, North Africa, Afghanistan and Pakistan collectively are also expected to slow down at 2.4 per cent this year, and recover to 3 per cent in the next. Some months ago, IMF chief Christine Lagarde had sounded the alarm for the economy and said reforms were the way forward. Her prediction is coming true. Positive factors that drove economic momentum in 2017 are ebbing. Unsustainable policies by governments and the rise of nationalists are causing more harm than good. The only answer to these bad tidings is more cooperation. More globalisation is what we need. A connected world is in our common economic interest. Are our leaders listening?


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