Fast News

Concerns escalate as tensions over trade and rising interest rates threaten to turn the world economy into a battleground just as global growth peaks.

'The sell-off this week shows the market is “digesting” the prospect of higher US interest rates as well as escalating trade tensions.' Picture: Michael Nagle/Bloomberg
‘The sell-off this week shows the market is “digesting” the prospect of higher US interest rates as well as escalating trade tensions.’ Picture: Michael Nagle/Bloomberg

Global finance chiefs warned that tensions over trade and rising interest rates threaten to turn the world economy into a battleground just as global growth peaks.

A year since they toasted the most synchronized expansion in years, policy makers at the IMF’s annual meeting fretted this week that the upswing may come apart as governments turn inward and the Federal Reserve creates ripples by tightening monetary policy.

As scenes from the medieval fantasy TV series “Game of Thrones” played on giant screens above him, Indonesian President Joko Widodo on Friday proclaimed “Winter is coming” — a line from the series underscoring the need for constant vigilance against external threats.

“When victory and defeat have been achieved, will we wake up to a world that is shattered?” Widodo asked in Bali, Indonesia, where finance ministers and central bankers from the fund’s 189 member nations are meeting. “It will be an empty prize, to become the most successful economy in a drowning world.”

Following the global financial crisis a decade ago, the world’s major economies banded together to calm markets and restore growth. But their leaders are now struggling to find common ground, with a trade dispute between the US and China showing little sign of ending soon and emerging markets struggling to cope with a reversal in capital flows.

Tumbling stock markets this week underscored the fraying consensus, though signs of calm returned Friday.

Against that backdrop, policy makers and economists — many of whom had their sleep disturbed early Thursday when a magnitude 6.4 earthquake struck off the resort island’s…