Daily Management Review

Global Economy Shrouded In ‘High Degree of Uncertainty’: BoJ Governor Ahead of G20 Meet


Downside risks gaping wide as Brexit worries, trade wars, currency depreciation engulf the economy across the globe.

Source: commons.wikimedia.org; (CC BY 2.0)
Source: commons.wikimedia.org; (CC BY 2.0)
The governor of Bank of Japan, Haruhiko Kuroda stated on Monday that the world economy stands at “highly uncertain” position which exhibit “downside risks” because of a couple of scenarios like the trade friction, the slowing Chinese economy and finally the unstable Brexit concerns.
Addressing a crowd in a seminar, Kuroda said:
“There is a high degree of uncertainty... and the downside risks are large”.
However, the positive notes of Kuroda’s talk were that the “capital outflows” risk in the “emerging market economies” as well as the extensive depreciation of currency observed all over seemed to have eased out.
He further added that this year’s G20 meet has an agenda to discuss on “current account balances” and the imbalance generated thus are not likely to get resolved through “bilateral trade measures”. The G20 finance ministers along with central bankers’ meet will be hosted by Japan and is scheduled to take place on “June 8th and June 9th”.
If the “current account balances” fail to align themselves with the “economic fundamentals”, G20 will have to delve into the reasons behind them for “running a deficit or surplus was not necessarily good or bad”, noted Kuroda.
In his words:
“As president of the G20, we will lead policy discussions at the meeting with all the relevant information and appropriate evaluations of global economic conditions”.
Thanks to the IMF lending facilities as well as the “expanded networks of currency swaps” countries could improve their defences against “global financial crises”. These comments are made by Kuroda at a time when the U.A. is surrounded amid tensions concerning its “main trading partners”.
Furthermore, Reuters reported:
“Japan and the United States are negotiating a bilateral trade pact. U.S. President Donald Trump, who is in Japan for a state visit, has made it clear he is unhappy with Japan’s $68-billion trade surplus with the United States, much of it from auto exports”.
The U.S. president, in an attempt to lower the country’s trade deficit, has waged a “trade war with China”, while the former further seeks to alter the practices that the “U.S. government considers unfair”.