Christine Lagarde issues hard-hitting defence of global economy
The head of the International Monetary Fund (IMF) has doubled-down on warnings against reversing the tide of globalisation.
Christine Lagarde, managing director of the IMF, told a conference in Chicago this afternoon policies that restrict trade between countries and seek to protect economies from foreign competition will hit the world's poorest citizens, branding such ideas "economic malpractice".
She pointed the finger at advanced economies, who have been gripped by pessimism despite signs of rapid progress in some areas of the developing world – particularly growth in India, the rebalancing of China's economy and early signs of recovery in Brazil and Russia.
"Restricting trade and limiting economic openness is sure to worsen the growth outlook for the world and especially its weakest citizens … it is a clear case of economic malpractice." Lagarde said.
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"The solution to making people better off is not to fall back on protectionism or other failed economic recipes of the past. If we were to turn our backs on trade now, we would be choking off a key driver of growth, at a point where the global economy is still in need of every good piece of news it can get.
"Shutting off trade would deny families and workers important economic opportunities, wreak havoc on supply chains, and raise the cost of many basic goods."
Lagarde has routinely called on policymakers to use all the tools they have available to boost growth, and ensure the benefits of economic expansion are inclusive and once again reiterated her proposals for stronger investment in education and infrastructure.