Dark economic cloud over IMF-World Bank meeting

People walk past a mural advertising the World Bank-IMF 2016 Spring Meetings April 5, 2016 in Washington, DC. Thousands of government officials, journalists, civil society organizations, and participants from the academia and private sectors, gather in Washington DC for the Spring Meetings of the International Monetary Fund and the World Bank Group. PHOTO | KAREN BLEIER |  AFP

By PAUL HANDLEY

In Summary

• The meetings open amid a rise in countries seeking aid from the IMF and the World Bank.
• Last week Angola, its finances battered by the plunge in oil prices, requested a three-year bailout program from the Fund.
• The meetings could also turn their focus to one source for feelings that economies are only serving elites: the "Panama Papers" trove of leaked documents.

Worries that the global economy is nearing a stall made worse by the spectre of '"Brexit" cloud the air as the world's finance chiefs gather in Washington beginning Thursday for the IMF-World Bank Spring meetings.

Finance ministers and central bankers will be greeted with dire warnings that if they do not take immediate action to boost growth and consumption, the world risks slowing to the point that recession is possible.

The IMF opened the week by cutting its forecast for world economic growth for the third time in six months, saying growth has been "too slow for too long."

It said intensifying financial and political risks around the world, from volatile financial markets to the Syria conflict to global warming, had left the economy "increasingly fragile."

Rising requests for aid

And it said it was concerned over rising nationalism and "fraying" unity in the European Union under pressure from the migration crisis and the possibility Britain might pull out of the European Union — Brexit. Britain votes on whether to remain in the 28-nation EU on June 23.

The Fund lowered its growth forecast for 2016 to 3.2 percent, compared to the 3.8 per cent it expected a year ago.

"Lower growth means less room for error," IMF chief economist Maurice Obstfeld said.

"The weaker is growth, the greater the chance that the preceding risks, if some materialize, pull the world economy below stalling speed."

The meetings open amid a rise in countries seeking aid from the IMF and the World Bank.

Last week Angola, its finances battered by the plunge in oil prices, requested a three-year bailout program from the Fund.

And the World Bank said Monday that its lending to needy countries surged last year "to levels never seen outside a financial crisis."

In meetings with the 189 country members of both institutions, and in parallel meetings of the G20 leading economies, the message will be that each country needs to try harder to reverse the downturn.

Those with stronger finances need to spend and invest, in infrastructure for example; others need to restructure and reform in ways that boost economic activity.

But also in the air is a need for a Plan B if growth and confidence further deteriorate, especially as doubts rise about the efficacy of the low and negative interest rates of leading central banks