IMF says Brexit uncertainty a top risk to global economy

[WASHINGTON] The International Monetary Fund said on Thursday that Britain's shock vote to leave the European Union a week ago has created uncertainty that poses a major threat to the global economy.

"We see the uncertainty right now as probably the biggest risk to the global economy," said IMF spokesman Gerry Rice, calling on European leaders and other policymakers to take "decisive" actions that could lower the threat.

The European Union and Britain face negotiations on the Brexit that are expected to be difficult and protracted.

European Union leaders say that until Britain formally begins exit proceedings, no talks can begin - formally or informally - on resetting Britain's ties with the EU, a process meant to last two years.

British Prime Minister David Cameron, who resigned after the June 23 Brexit vote, has resisted pressure to immediately activate the Article 50 mechanism to leave the EU, saying he is leaving it to his successor, who will not be named until Sept 9.

"Brexit has created significant uncertainty and we believe this is likely to dampen growth in the near term, particularly in the UK but with repercussions also for Europe and for the world economy," said Mr Rice in a regularly scheduled IMF news conference.

"We need to be ready, all of us policymakers, with decisive actions that can help mitigate that as much as possible."

AFP

For more coverage of the EU referendum, visit bt.sg/BrexiT