IMF chief Christine Lagarde sees "no signs" of U.S. recession "in the near term"
Christine Lagarde, managing director and chairwoman of the International Monetary Fund (IMF), said she sees no indications the American economy is heading towards a recession in the near future, despite a recent stock market slump and slower job growth.
"We have a [global growth] forecast for this year and next which is around 3.7 percent. It's not bad actually," Lagarde said on "Face the Nation" Sunday. "We don't see signs of recession in the near term based on the information we have at the moment."
Still, as the head of an organization comprising nearly 200 countries meant to promote international financial cooperation and trade, Lagarde cautioned that protectionist policies, tariff hikes and a burgeoning trade war pose threats to the global economy.
"If there are more tensions, if trade is under threat — if people sort of wonder, 'where should I invest? And should I completely change my supply chain?' — that will have an impact," Lagarde said.
Last week, the U.S. and China reached a 90-day truce in their trade dispute, with President Trump and Chinese President Xi Jinping agreeing at the G-20 summit in Argentina to halt further tariffs as negotiations continue. U.S. Trade Representative Robert Lighthizer said on "Face the Nation" Sunday that March 1 is a "hard deadline" for the U.S. to reach an agreement with China.
Lagarde wished the ambassador luck in the negotiations with the Chinese and said a permanent resolution to the trade dispute between the two economic giants is in the interest of economies around the world.
"It is vitally important because trade is a major engine for growth," she said. "Trade, if it is damaged, if it is threatened, is going to affect growth. Less growth, less jobs, less investments, because people suddenly who are in the business of investing, who are in the business of creating jobs, will lose confidence."
Lagarde, who served as France's finance minister between 2007 and 2011, also called the massive public unrest in Paris over tax hikes proposed by the government of President Emmanuel Macron "extremely sad."
"I really hope that the dialogue can be re-established, that people can express their views, their grievances can be heard, that they can be addressed as well," Lagarde said.
She urged France and other countries to address the "rising and excessive inequalities between people" and "aging of societies" to quell anger and discontent in working-class communities.
Lagarde added that some of the issues that precipitated the global financial crisis in 2008 have not been properly addressed, with many people around the world yet to fully recovered. "I think that some of the legacies of the crisis have not yet been completely healed — and the wounds are still there," she said.
Asked about the role of women in the global economy, Lagarde, who was named one of the most powerful women in the world by Forbes this week, said gender inclusivity in workplaces fosters financial growth.
"In the U.S., if there was equal participation of women in the labor market, GDP would be up by 5 percent," Lagarde said. "If it operated in the same way in India or in Egypt for instance, GDP could be up by 27 percent."
"Women can be a phenomenal force for growth," she added.
