IMF sees negative ‘repercussions’ from Brexit on global growth

Source: Market Watch Personal Finance

The Brexit vote will have negative repercussions that will spread beyond the U.K. and Europe to the global economy, the International Monetary Fund said Thursday.

The risks arise mainly from macroeconomic and financial market impact of a sizable increase in uncertainty, especially about the future relationship between the U.K. and EU “and we believe this is likely to dampen growth in the near term,” said IMF spokesman Gerry Rice at the regular press briefing.

If the uncertainty lasts, it would mean even lower growth, Rice said.

Prior to the referendum, the international financial agency had added its voice to a chorus of warnings on the potential costs of a U.K. exit from the EU.

See: IMF warns of pressure on U.K. economy if Brexit materializes

The IMF doesn’t have any specific recommendation for U.K. and EU officials, but said they have a “key role to play” to make the transition predictable and smooth.

This echoes earlier comments from IMF Managing Director Christine Lagarde.

See: IMF urges U.K., Europe to work collaboratively after Brexit vote

“A quick agreement that is prudent and acceptable to all would be optimal, but rushing to a negative outcome would not be in anyone’s interest,” Rice said.

“I think this is very much a matter for the U.K. and the EU to work out,” he added.

In April, the IMF cut its global growth forecast to 3.2% from the 3.4% it was forecasting in January. The next update will come on July 19.

Read: IMF cuts global growth forecast, warns against nationalism

Source: Market Watch Personal Finance