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Lagarde warns of ‘uneven’ economies; Germany cuts output stats
October 8, 2015, 5:41 pm

Lagarde had previously warned of volatility in emerging markets, which dragged global economic forecasts down [Xinhua]

Lagarde had previously warned of volatility in emerging markets, which dragged global economic forecasts down [Xinhua]


With emerging markets continuing to lose steam as the appetite for global commodities wanes, Germany on Thursday announced that its economy – the strongest in Europe – could be going through a slowdown.

The German Federal Statistics Office said on Thursday that seasonally-adjusted exports retracted by 5.2 per cent to $109 billion month-on-month, marking the sharpest drop in almost six years.

Imports also slid by by 3.1 per cent to $88.2 billion, marking the sharpest one-month drop in nearly three years.

The report comes as the German juggernaut economy registers significant drops in industrial orders and output – largely due to a decline in global demand.

The economy grew 0.3 per cent in the first quarter; it grew by 0.4 per cent in the second.

In German markets, Deutsche Bank shares opened down 3.6 per cent after the institution announced a loss of $7.2 billion. It recovered to close down only 0.8 per cent.

Except for Greece, most European markets closed up on Thursday: The FTSE 100 closed up 0.61 per cent; Germany’s Dax and France’s Cac 40 both closed up over 2 per cent.

But International Monetary Fund chief Christine Lagarde warned during a press conference following a Global Policy forum in Lima, Peru that she feared a volatile global economy in a “rapidly changing and uncertain world”.

“Policymakers are increasingly grappling with difficult policy trade-offs,” she said in remarks carried by Reuters. She called on policymakers to take decisions that would spur global demand.

Her statement came just a day after the IMF cut its global economic growth forecast for a second time in four months from 3.3 per cent to 3.1 per cent largely due to waning commodity prices and China’s slowdown.

“Relative to last year, the recovery in advanced economies is expected to pick up slightly, while activity in emerging market and developing economies is projected to slow for the fifth year in a row, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries,” the IMF said in its report on Wednesday.