Connect with us

The global economy, while still growing, has hit a plateau and may not be strong enough to withstand rising trade tensions, International Monetary Fund (IMF) Managing Director Christine Lagarde said Thursday.

The IMF earlier this week cut its forecast for global growth to 3.7 percent this year and next year — down 0.2 percentage points from an earlier estimate. The downward revisions mean that the global economy would grow by the same rate for three consecutive years starting 2017.

“The real question is: Is the economy strong enough? To that, my answer is ‘probably not enough’ because we clearly see growth has plateaued three years in a row — it is at 3.7 percent — and we also see that growth is unevenly allocated around the world,” Lagarde told reporters at the IMF and World Bank annual meetings in Bali, Indonesia.

“Moreover, some of the risks that we have highlighted at our spring meetings in April have now begun to materialize, especially from the rising trade barriers,” she added. “If these tensions were to escalate, the global economy would take a significant hit.”

In addition to the hit to economic growth prospects, worsening trade tensions could also trigger another global financial crisis, the IMF said earlier this week.

Lagarde said the best response to the ongoing tensions is to “de-escalate, fix the system, don’t break it.” She added that the casualties won’t just be the U.S. and China — the two largest economies in the world in the center of the current tariff fight – but also countries that are part of the global supply chain and suppliers of raw materials to manufacturers involved in the dispute.

Source link

World

Raytheon exec on sales to Saudi Arabia: ‘We don’t make policy’

Published

on

U.S. Soldiers talk after a routine inspection of a Patriot missile battery at a Turkish military base in Gaziantep, Turkey.

Department of Defense photo

U.S. Soldiers talk after a routine inspection of a Patriot missile battery at a Turkish military base in Gaziantep, Turkey.

Doing business in the Middle East often presents numerous minefields. Few likely know this better than John Harris, CEO of defense manufacturing giant Raytheon International.

Amid calls by U.S. lawmakers to reduce weapons sales to Saudi Arabia and other Gulf countries involved in offensive warfare in the Middle East, corporates in the defense space are coming under increased scrutiny. But their sales adhere strictly to U.S. policy, Harris told CNBC at the Munich Security Conference on Saturday, deflecting policy responsibility away from the company itself.

“We are an element of U.S. policy — our role is not to make policy, our role is to comply with it,” Harris told CNBC’s Hadley Gamble.

“What we’re trying to do is make sure we remain relevant, we have the right capabilities, to the extent there are questions that we provide the responses, and that we continue to comply with U.S. laws and regulations.”

Bipartisan support in Congress has been building at an unprecedented pace for cuts to support for Saudi Arabia in its war in Yemen, which the UN has described as the world’s worst humanitarian crisis.

The Saudi-led coalition, which includes the United Arab Emirates, Egypt, Bahrain and others, is backed by the U.S. with intelligence, logistics and training support. But since the October murder of Saudi journalist Jamal Khashoggi, which numerous lawmakers blame squarely on the Saudi government, U.S. support for the kingdom is coming under serious pressure.

Source link

Continue Reading

World

Trump’s message is having an impact on NATO, secretary general says

Published

on

NATO Secretary-General Jens Stoltenberg talks to the media as he arrives at an European Union leaders summit in Brussels, Belgium, June 28, 2018.

Yves Herman

NATO Secretary-General Jens Stoltenberg talks to the media as he arrives at an European Union leaders summit in Brussels, Belgium, June 28, 2018.

NATO Secretary General Jens Stoltenberg told CNBC that President Donald Trump‘s rhetoric on defense spending is having an “important” impact on the military alliance.

“I’m saying that his message has been very clear and that his message is having an impact on defense spending. And this is important because we need fairer burden sharing in the NATO alliance,” he told CNBC’s Hadley Gamble at the Munich Security Conference on Saturday.

“We see more nations spending 2 percent of GDP (gross domestic product) on defense which is the NATO guideline and we see that all nations have stopped the cuts we saw for many years to their defense budgets. And all nations have started to increase,” he added.

Contributions to NATO are a highly sensitive topic. Trump has often criticized other NATO members for not respecting the spending rule. Speaking at a NATO summit in 2017, Trump said: “Over the last eight years, the United States spent more on defense than all NATO countries combined. If all NATO members had spent just 2 percent of GDP on defense last year, we would have had another $119 billion for our collective defense.”

Members are obliged to spend the equivalent of 2 percent of their own gross domestic product (GDP) on NATO. These payments are used “to meet the needs of its armed forces, those of allies or of the alliance,” to pay pensions to retired military, to contribute to NATO-managed trust funds as well as research and development.

—CNBC’s Silvia Amaro contributed to this article.

Source link

Continue Reading

World

US advisor Bolton promises India support after Kashmir attack

Published

on

National Security Advisor John Bolton answers questions from reporters as he announces that the U.S. will withdraw from a treaty with Iran during a news conference in the White House briefing room in Washington, October 3, 2018. 

Jonathan Ernst | Reuters

National Security Advisor John Bolton answers questions from reporters as he announces that the U.S. will withdraw from a treaty with Iran during a news conference in the White House briefing room in Washington, October 3, 2018. 

U.S. National Security Advisor John Bolton spoke to his Indian counterpart promising support to bring those responsible for a deadly car bombing in disputed Kashmir to justice, the Indian Foreign Ministry said on Saturday.

A Pakistan-based militant group, Jaish-e-Mohammad, has claimed responsibility for the attack on a military convoy in which 44 paramilitary police were killed, raising tensions with India.

Bolton told Ajit Doval in a telephone conversation that the United States supported India’s right to self-defense against cross-border terrorism, the Indian Foreign Ministry said in a statement.

India has demanded Pakistan act against the Jaish. Pakistan had condemned the attack but denied any complicity.

“The two NSAs vowed to work together to ensure that Pakistan cease to be a safe haven for JeM and terrorist groups that target India, the U.S. and others in the region,” the ministry said.

“They resolved to hold Pakistan to account for its obligations under U.N. resolutions.”

Source link

Continue Reading

Trending