WASHINGTON, Aug 9 (Reuters) - The International Monetary Fund said on Friday that China may need more fiscal stimulus if trade tensions with the United States worsen, putting economic and financial stability at risk.
The IMF’s board said in its annual assessment of China’s economic policies that Beijing’s announced policy measures are sufficient to stabilize the country’s growth in 2019 provided that there are no further increases in tariffs.
“Directors agreed that if trade tensions escalate further, putting at risk economic and financial stability, additional stimulus, mainly fiscal, would be warranted and should be targeted,” The IMF said in a statement.
IMF directors agreed with staff assessments that China’s external position in 2018 was broadly in line with fundamentals but called for more flexibility and transparency in China’s exchange rate policies, the IMF said, with some seeking disclosures of China’s foreign exchange market interventions. (Reporting by David Lawder; editing by Jonathan Oatis)