IMF Chief visits Indonesia with some advices
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Christine Lagarde, the managing director of the International Monetary Fund, said on Tuesday (27/02) the global economy was showing broad-based growth, but the landscape was shifting with heightened risks of trade disputes, monetary policy normalization and technological change.
Lagarde, speaking to an IMF conference in Jakarta in preparation for the Fund’s annual meetings in Bali in October, said the IMF was expecting global growth to reach 3.9 percent in 2018 and 2019. This is unchanged from the IMF’s forecast in January and up from 3.7 percent in 2017.
She said Asean countries were preparing for higher interest rates in advanced economies such as the United States and Europe, but cautioned that policymakers need to stay vigilant about its effect on financial stability and volatile capital flows.
“We know this will have spillover effects across the world. We have known for some time that it’s coming,” Lagarde said. “It remains uncertain how this transition is going to affect other countries, companies, jobs, incomes.”
Asean countries need to embrace new growth models that put a greater emphasis on domestic demand, regional trade and economic diversification and prepare for technological changes such as increased factory automation, artificial intelligence, biotechnology, new financial technologies and digital currencies.
While these could eliminate some jobs, it was important for countries to boost efforts to educate workers to better prepare them to take advantage of new technologies.
“Many jobs will be affected one way or another. Some of them will disappear, but many more will be affected because of automation. So we need to think about the future of work,” Lagarde said, adding that there was no single approach, and many countries will forge their own path.
She highlighted Go-Jek, the fast-growing ride-hailing and delivery service in Indonesia, as an example of a country-specific technology innovation targeted to the country’s needs and workforce.
Questions & Answers
Q.What are the main risks the IMF has identified for the global economy?
What are the main risks the IMF has identified for the global economy?
The IMF highlights heightened risks from trade disputes, monetary policy normalisation, and technological change. These factors are seen as shifting the economic market despite broad-based growth.
Q.How do ASEAN countries need to prepare for potential economic changes?
How do ASEAN countries need to prepare for potential economic changes?
ASEAN countries should prepare for higher interest rates in advanced economies and embrace new growth models. This includes focusing on domestic demand, regional trade, economic diversification, and adapting to technological advancements.
Q.What is the IMF's forecast for global economic growth in the coming years?
What is the IMF's forecast for global economic growth in the coming years?
The IMF expects global growth to reach 3.9 percent in both 2018 and 2019. This forecast is unchanged from its January projection and represents an increase from 3.7 percent in 2017.
Q.How does the IMF suggest countries address the impact of new technologies on employment?
How does the IMF suggest countries address the impact of new technologies on employment?
Countries need to boost efforts to educate workers so they are better prepared to take advantage of new technologies. This approach aims to help the workforce adapt as some jobs disappear or are affected by automation.
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