Sunday, July 24th, 2016

Brexit will add uncertainty to world economy: G20 group

Jonathan Vikram Pradhan | July 24, 2016 4:38 pm Print
G20 group said it was well placed to actively cope with the potential economic and financial impact from the Brexit vote.
Brexit, EU referendum, IMF

Britain’s decision to leave European Union heightens risks for the world economy, finance chiefs at the G20 Summit have said, according to BBC report.

It (Brexit) “adds to the uncertainty” to the global economy, the group of world’s 20 largest economies said. “In the future, we hope to see the UK as a close partner of the EU,” it added.

The subject came up “a great deal” during the two-day talks, the report quoted Philip Hammond, chancellor of the Exchequer, as saying.”The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU,” he told reporters.

However, G20 group said it was well placed to actively cope with the potential economic and financial impact from the Brexit vote.

The group listed out other factors complicating the world economy as: geopolitical conflicts, terrorism and refugee flows during the two-day summit in Chinese city of Chengdu.

The report said president of Germany’s central bank, Jens Weidmann said that there were no signs of economic development being affect by the referendum.

The forecast of the global economy improving in 2016-17 despite the Brexit vote was seen positively by the G20 group.

Earlier, a data report by IHS Markit’Purchasing Managers’ Index, or PMI had showed Britain’s economy fall to 47.7 in July, the lowest level since April in 2009. Both manufacturing and service sectors saw a decline in output and orders.

The report had surveyed more than 650 services companies, from sectors including transport, business services, computing and restaurants.

The Britain’s exit process from EU is led by the new prime minister Theresa May. Her first move on this direction came when she decided to opt out from Britain’s presidency of the EU council in 2017. She took this decision keeping in mind the likelihood of the exit process being set into motion by middle of next year.

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