Germany's reluctance to cut its trade surplus contributes to trade tension and increases risks to global financial stability, the IMF's chief economist said. In a special commentary to a German newspaper, he said the current account surplus in countries such as Germany sees reluctant measures to counter the surplus.
The International Monetary Fund and the European Commission have long urged Germany to boost domestic demand by raising wages and investment to reduce so-called global economic imbalances. Since his election, US President Donald Trump has been critical of Germany's export power.
Countries such as the United States, where the current account balance is very low, should reduce the budget deficit and encourage households to save more and gradually normalize their monetary policy, the IMF's chief economist said.
On the other hand, countries like Germany, where the balance is too high, must increase government spending by investing in infrastructure, for example.
