Moreover, the possibility of a Brexit, coupled with Europe's refugee crisis and attacks by Islamist militants, had resulted in a "rising tide of inward-looking nationalism," Obstfeld added. Noting that a likely exit of Britain from the EU - also known as Brexit - had already created uncertainty for investors, IMF chief economist Maurice Obstfeld said: "A Brexit could do severe regional and global damage by disrupting established trading relationships." The IMF pointed to "intensifying financial and political risks" around the world, from volatile financial markets over the war in Syria to global warming, saying they had left the economy "increasingly fragile" and vulnerable to a turn toward recession.Īlong with instability in China, volatile share prices and a loss of long-term growth potential in advanced economies, the IMF listed Britain's June 23 referendum on EU membership as a key risk for the global economy.
In its quarterly World Economic Outlook report, the crisis lender noted that global economic expansion had been "too low for too long," and called for immediate action by the world's economic powers to shore up growth.
Three days ahead of a joint meeting with the World Bank in Washington, the IMF on Tuesday lowered its growth forecast for 2016 from 3.4 percent to 3.2 percent.