European Central Bank President Christine Lagarde said global growth is likely to get a boost from abating uncertainties on trade issues in the wake of new pacts being signed.
Speaking here at a session on the global economic outlook on the last day of the WEF 2020 on Friday, the former IMF chief said uncertainties have abated on issues like trade and Brexit, and it is likely that income growth and low unemployment will eventually be reflected in prices.
“Trade has been dramatically low recently and didn’t help growth much. So we are delighted to see trade agreements being negotiated and completed. I believe this will remove uncertainties the world over,” she said.
“ I think the distribution of benefits and costs as a result of trade diversion remains to be seen because it is not going to be win-all arrangements.
“There will be some downside effect and we at ECB are measuring where the chips will fall and who will lose out of that re-diversion under the various agreements,” she said.
In the same session, US Treasury Secretary Steven Mnuchin said trade negotiations have started with both the EU and the UK and we look forward to completing both of those deals this year.
The US also expects the second phase of negotiations for a trade deal with China to begin soon.
“The European Central Bank has launched a broad strategic review, the first since 2003, to revisit the bank’s processes and policies and to recommend structural changes,” Lagarde said, committing to delivering the outcomes of this review at the next annual meeting.
