Trade war won’t benefit anyone, says IMF chief

International Monetary Fund managing director Christine Lagarde. (Bloomberg pic)

KUALA LUMPUR: International Monetary Fund (IMF) managing director Christine Lagarde today said the trade tension between the US and China will not benefit anyone.

“Traders will not benefit and consumers will consume, and it will not increase the well-being of the people with more inclusive growth.

“We hope that the trade tensions do not escalate (but) the best way is for Malaysia to prepare and build its policy buffers, including fiscal policies,” she said in a joint press conference with Bank Negara governor Nor Shamsiah Mohd Yunus here today.

She said Malaysia could also boost its trade by working with Asean countries, cautioning that benefits to certain countries from the trade war would only be for the short term.

“There will be slower global growth if this trade tension continues,” she said.

Meanwhile, Nor Shamsiah said under Lagarde’s leadership, significant effort had been made to increase the representation of emerging economies at IMF in recognition of their growing importance to the global economy.

“IMF has also been very appreciative of the views and approaches of emerging economies in addressing policy challenges,” she said.

These include broadening issues of work that cover governance, corruption, inequality, climate change and national linkages to the larger economy.

Lagarde said she would meet Prime Minister Dr Mahathir Mohamad and Finance Minister Lim Guan Eng later today to discuss Malaysia’s fiscal and monetary policies as well as corruption and governance.