Tuesday 15 October, 2019

World Bank approves increase in lending capacity

(Foreground from left) U.S. Treasury Secretary Steve Mnuchin, Japan's Finance Minister Taro Aso and U.K. Chancellor of the Exchequer Philip Hammond sit with others for the group photo of International Monetary Fund governors at the World Bank/IMF Spring Meetings in Washington.

(Foreground from left) U.S. Treasury Secretary Steve Mnuchin, Japan's Finance Minister Taro Aso and U.K. Chancellor of the Exchequer Philip Hammond sit with others for the group photo of International Monetary Fund governors at the World Bank/IMF Spring Meetings in Washington.

The World Bank's policy committee has approved a $13 billion increase in the bank's lending capacity.

The proposal was approved late Saturday by the World Bank's Development Committee, which sets policies for the 189-nation lending agency. The increase in lending capacity was tied to a package of lending reforms that had been sought by the United States.

World Bank President Jim Yong Kim hailed the action as a demonstration of "renewed confidence in global cooperation."

At the same time, the International Monetary Fund's (IMF) policymaking committee says a strong world economy is threatened by increasing tension over trade and a heavy global debt load.

Officials say longer-term global prospects are clouded by sluggish productivity growth and aging populations in wealthy countries.

Policymakers say in a statement at the end of three days of meetings that countries should take advantage of the broadest-based expansion in a decade and enact reforms that will make their economies more efficient. And cutting government debts is urged.

The IMF expects the world economy to grow 3.9 percent this year and next — that would be the fastest since 2011.

But an intensifying dispute between the U.S. and China over Beijing's aggressive attempt to challenge U.S. technological dominance has raised the prospect of a trade war that could drag down worldwide growth.

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