00:00Now there are many simultaneous sessions taking place during the week on the big challenges confronting leaders.
00:06A key question, how to unlock new sources of growth, which is why the International Monetary Fund's growth forecast
00:12that Tanza mentioned just there make for such interesting reading.
00:16Global GDP growth is predicted to hit 3.3% this year, with China's forecast revised up to 4.5%.
00:23Petra Koba-Brooks is the Deputy Director of the IMF Research Department.
00:30At the global level, we are seeing an economy that is very resilient,
00:35and we have actually upgraded our forecast for this year to 3.3%.
00:41But underneath that, there are forces going in different directions.
00:46So the trade tensions and the uncertainty, the policy uncertainty that we've observed, has been pulling growth down.
00:55And at the same time, we've seen a lot of strength in the technology sector, in the AI sector, that has been pulling up growth.
01:05So when we put all of that together, we have that upward revision to our forecast.
01:12Now, China's data has been out.
01:14The economy expanded 5% in 2025, hitting its growth target.
01:19Trade surplus hit a record $1.2 trillion, void by exports growth.
01:25The IMF has revised up their forecast for China.
01:29And what impact is all of that going to have on the global trading system?
01:32Yes, we have seen a remarkable resilience in trade, and we have seen, again, an increase in that trade surplus.
01:43Part of that has been due to the trade rerouting, the trade diversion.
01:51So even though China's trade with the U.S. has come down, that has been offset by increased trade with other regions.
02:01Now, and this is not just in basic products, it's also China has become very competitive and fairly complex products.
02:10And more generally, I think the competition between China and other countries for some of these goods has become more intense.
02:23So that could also put additional pressure on potential trade tensions, which is another reason why we've been arguing for rebalancing of the Chinese economy towards more domestic demand growth.
02:41And I think some of the measures that have been implemented, including on additional fiscal stimulus, have gone in that direction, but they're not sufficient in our views.
02:50So we have further recommendations in that area.
02:53So it'd be interesting to see what comes out in the 15th five-year plan and what incentives and what policies are there for foreign investors as well.
03:03What do you think would most likely trigger a global economic crisis in 2026?
03:11Well, let me be clear.
03:13We do not have a crisis in our forecast.
03:17What we have is a fairly resilient global economy, but as I mentioned, there are a number of risks there.
03:26So the escalation of geopolitical tensions and trade tensions is certainly one area.
03:34But another kind of focal point in our report is related to the possibility that there is disappointment about productivity gains from AI.
03:47And if that were to lead to a correction in stock markets, that would have a wealth effect and more broadly would bring activity down.
03:56We have a scenario in which we point to the fact that in that type of setting, we could see global growth of about 0.4 percent lower than what we have in our baseline.
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