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The International Monetary Fund (IMF) expects a more significant global slowdown than it did three months ago, the funds First Deputy Managing Director David Lipton said on Wednesday, adding further that an economic recovery will remain elusive if the trade uncertainty continues.

The IMF cut its outlook for 2019 global growth to 3.2% in July, the fourth downgrade since last October.  

Key quotes (Source: Bloomberg)

We see the global economy going through a gradual, synchronized slowdown.

Unless the trade tensions are defused, it’s very hard to see mainstream macroeconomic tools countering the impact of escalating trade difficulties, so it’s very important that those be de-escalated.

It’s been important that central banks have stood ready to continue providing support. We believe that’s been a material factor in stemming the slowdown in the global economy. It’s important that fiscal policy stand ready if there’s further slowdown to react where countries have policy space.

Rates have been low for a long time in major parts of the advanced world. They are likely to stay low. There’s the risk that, over time, financial stability vulnerabilities arise.  

We don’t think that’s an imminent problem. But we think it’s important for policy makers to be looking at these risks, monitoring them, and trying to make sure that we don’t have a repeat of financial instability, as we saw how damaging that could be during the global financial crisis.