IMF, World Bank Meetings Clouded by Wars, Slow Economic Growth, US Election

• Global finance chiefs will gather in Washington this week amid intense uncertainty over wars in the Middle East and Europe, a flagging Chinese economy and worries that a coin-toss U.S. presidential election could ignite new trade battles and erode multilateral cooperation.
• However, the elephant in the meeting rooms will be the potential for a Nov. 5 election victory by U.S. Republican presidential candidate Donald Trump. Trump’s victory could upend the international economic system with massive new U.S. tariffs and borrowing and a shift away from climate cooperation. S. Vice President Kamala Harris, the Democratic presidential candidate, is largely expected to continue the Biden administration's resumption of multilateral cooperation on climate, tax and debt relief issues if she wins next month's vote.
• Growing anti-China trade sentiment and industrial policy plans from wealthy countries, punctuated by the Biden administration's steep tariff increases on Chinese electric vehicles, semiconductors and solar products, are expected to be a key discussion topic at the meetings.
• While debt defaults among poor countries may have peaked, participants at the annual meetings are expected to discuss the growing problem of scarce liquidity that is forcing some emerging markets saddled with high debt service costs to delay development investments as overseas aid shrinks.
• Support for Ukraine will also be a major topic at the meetings, as the G7 wealth democracies aim to reach a political agreement by the end of October for a $50Bn loan for the Eastern European country backed by frozen Russian sovereign assets. The loan in part is seen as a financial bulwark against a Trump victory next month, as the former U.S. president has threatened to "get out of Ukraine."

(Source: Reuters)