U.S. Markets

IMF's Lagarde says tariff actions don't pose global recession threat

FILE PHOTO: International Monetary Fund Managing Director Christine Lagarde speaks at the Women's Forum Americas, at Claustro de Sor Juana University in Mexico City, Mexico, May 30, 2019. REUTERS/Henry Romero

WASHINGTON (Reuters) - International Monetary Fund Managing Director Christine Lagarde said on Wednesday that the IMF does not currently see the threat of a global recession brought on by a widening U.S.-China trade war and potential U.S. tariffs on Mexican goods and autos.

Lagarde told Reuters in an interview, however, that such tariff threats were sapping business and market confidence, and could slow growth that is currently expected to improve next year.

“We don’t see a recession,” Lagarde said when asked whether U.S. President Donald Trump’s threatened tariff actions could tip the global economy into recession. “Decelerating growth, but growth nonetheless -- 3.3 percent at the end of this year, and certainly a strong U.S. economy. We do not see at the moment, in our baseline, a recession.”

Reporting by David Lawder; Editing by Sandra Maler