Given the “uncharted nature” of the recovery from the coronavirus pandemic, “considerable uncertainty remains," the fund warns.
“The anonymity of crypto assets and limited global standards create significant data gaps for regulators.”
"Uncertainty remains high" and "central banks may need to take preemptive action," the Fund warns in its latest World Economic Outlook.
The Fund now expects the global economy to contract by 3% this year due to the coronavirus pandemic.
Accommodative monetary stimulus has encouraged financial risk-taking, leading to “worrisome” levels of debt with poor credit quality, the Fund says.
“Further escalation of trade tensions and associated increases in policy uncertainty" could result in lower-than-expected growth next year, the IMF says.
The fund sliced two percentage points off its previous forecast for 2018 and 2019 and said U.S. growth would slow to 2.5% next year.
"While it is tempting to sail alone, countries must resist the siren call of self-sufficiency,” Christine Lagarde says.
The government announces new taxes and steep spending cuts as the sliding peso makes it harder to service the country's debt.
The IMF urges countries to "build fiscal buffers now by reducing government deficits and putting debt on a steady downward path."
Credit spreads will widen and defaults will increase, say some portfolio managers. But pinpointing the 'when' is almost impossible.
However, its projection for economic growth in the United States this year remains modest, at 2.2%.
