A slowing Chinese economy and an ongoing government shutdown in the United States have some experts worried about possible damage to the world economy.
China’s economic slowdown has been a major discussion at this year’s World Economic Forum, which began Monday in Davos, Switzerland. The Chinese economy grew 6.6 percent in 2018, its slowest rate in 28 years. Fears about China’s slowing economy have been worsened by its trade war with the United States.
But Chinese officials have said the country’s slowdown will not lead to wide trouble. Fang Xinghai, who is with China’s Securities Regulatory Commission, said China may be slowing down “but it’s not going to be a disaster.”
Fang also told international leaders gathered in Davos that the structure of the Chinese government - where the central, communist party holds so much control - makes fixing the economy easier.
And Chinese Premier Li Keqiang has promised the government would not let the economy "fall off a cliff.”
U.S. government shutdown
U.S. President Donald Trump did not travel to Davos this year for the World Economic Forum. He canceled his trip last week “out of consideration for the 800,000 great American workers not receiving pay” during the ongoing shutdown, the White House said in a statement.
The partial government shutdown has entered its fifth week, as the standoff between President Donald Trump and Democrats over funding for a border wall continues.
It is causing more economic damage than expected. Trump administration economists had first estimated the shutdown would cost the economy .1 percentage point in growth every two weeks that employees went without pay.
But White House officials have increased that estimate to .13 percentage point every week.
IMF reduces growth estimates
On Monday, the International Monetary Fund released its World Economic Outlook report. The IMF predicts the world economy will grow at 3.5 percent in 2019 and 3.6 percent in 2020. That is down from its estimates released last October, when IMF economists were already predicting slowing growth both in China and the United States because of trade disputes.
IMF Managing Director Christine Lagarde told reporters, “After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising.”
Lagarde urged policymakers to prepare for a “serious slowdown.”
I’m Susan Shand.
Susan Shand adapted this story for Learning English. Ashley Thompson was the editor.
Words in This Story
funding - n. an amount of money that is used for a special purpose
cliff – n. a high, steep surface of rock