The recent turmoil in financial markets and the struggling Chinese economy
could combine to hit global economic growth this year and force central banks to keep interest rates low, the International Monetary Fund has said ahead of a meeting of
G20 finance ministers in Ankara this weekend.
In a downbeat report that charted the increasing risk of a global slowdown, the IMF said finance ministers attending the conference in the Turkish capital needed to maintain government spending despite the still high public sector debts left over from the 2008 banking crash.
It said emerging economies reliant on the sale of oil and basic commodities would be especially vulnerable to a decline in trade with Beijing, which has soaked up much of the world’s resources in the last decade.
“Risks are tilted to the downside, and a simultaneous realisation of some of these risks would imply a much weaker outlook,” it said, reinforcing a warning from IMF boss Christine Lagarde earlier this week.
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