IMF: Gloomy Brexit Forecasts for UK are Coming True

Christine Lagarde, the IMF Managing Director. Stefan Rousseau/AP
Christine Lagarde, the IMF Managing Director. Stefan Rousseau/AP
TT
20

IMF: Gloomy Brexit Forecasts for UK are Coming True

Christine Lagarde, the IMF Managing Director. Stefan Rousseau/AP
Christine Lagarde, the IMF Managing Director. Stefan Rousseau/AP

The International Monetary Fund has strongly defended its gloomy forecasts for the UK after Brexit, saying pre-referendum warnings of slower growth were coming true.

IMF declared that the exit of UK from the EU is the greatest danger on its economy. In its report on Wednesday, the Fund assured that in case a progress was made in negotiations then this would reinforce trust in the British economy, and in case they failed then this might lead to an unorganized exit from EU, and therefore a collapse in European capital markets.

Since the turn of the year, Lagarde said activity had slowed notably and the UK’s recent performance was a disappointment in the light of the best showing by the global economy since the financial crash.

The IMF’s latest forecast suggests that the UK’s medium-term potential productivity growth is only 1.5, similar to 2017.

Lagarde pointed out that the British economy is affected with the electorates decision, last year, to exit the EU and the government decision to move on with the separation decision.

The Fund stressed that UK is facing uncertainty because it is beginning an ambitious mission to negotiate on the exit from the EU, warning that despite the progress achieved by the UK in talks, but there is still a risk of not reaching a final deal.

Talks include agreeing on a trade deal with the EU and negotiating on new arrangements with around 60 countries to discuss agreements in which UK was a member of during its membership in the EU.

British Prime Minister Theresa May said that UK will exert best efforts to protect the position of London as the globally biggest financial center, during talks of separation from the EU.



Gazprom, CNPC Discuss Future Russian Gas Supplies to China

A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
TT
20

Gazprom, CNPC Discuss Future Russian Gas Supplies to China

A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo
A view shows a board with the logo of Russian gas producer Gazprom at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia June 5, 2024. REUTERS/Anton Vaganov/File Photo

The heads of Russia's Gazprom and China's energy company CNPC discussed future Russian gas supplies to China during talks in Beijing, Gazprom said on Friday, as Moscow seeks stronger ties with the world's biggest energy consumer.

Russia, the holder of world's largest gas reserves, has diverted oil supplies from Europe to India and China since the start of the conflict in Ukraine in February 2022, Reuters said.

At the same time, Russia's diversification of pipeline natural gas from the European Union has been slow.

It started gas exports to China via the Power of Siberia pipeline in the end of 2019 and plans to reach the pipeline's annual exporting capacity of 38 billion cubic meters this year.

Russia and China have also agreed on exports of 10 bcm of gas from Russia's Pacific island of Sakhalin starting from 2027.

However, years of talks about the Power of Siberia 2 pipeline, which would ship 50 bcm of gas per year to China via Mongolia, have yet to be concluded as the two sides disagree over issues such as the gas price.

Russian President Vladimir Putin is set to travel to China in early September to participate in celebrations marking the anniversary of the victory over Japan in World War II.

The trip follows Chinese President Xi Jinping's visit to Moscow in May.