health care. and specifically with the problems that we are having with opioids. and probably every american is affected. voices from the road. the international monetary funds managing director spoke at the annual "wall street journal" ceo counsel meeting last week. here is a portion of that conversation. >> so larry gave us a very good primer on the u.s. economy, and began talking about the international economy, and let's take that up further. and so we will look at the economies outside of the united

states. >> thank you. >> so happy to have you here. >> okay. so, let's get right into it. we heard an upbeat view of the u.s. economy and complaints about the global economy. with. despite everything mr. kudlow just said, we've also seen a slowdown in u.s. growth in year and a slump in manufacturing, decline in business investment. from your perch, what's your outlook for the u.s. economy in the coming year? >> well, the u.s. is in a good place, and people in this room have contributed to that. we have what is a longest in histo history expansion, lowest in the last 50 years unemployment. what we value particularly is to see that wages are going up in the u.s., and wages of low-paid

workers are outpacing wage growth on average. that is driven by productivity gains, very important to recognize. but you're right, there are issues. manufacturing and agriculture are more on the soft footing than the rest of the economy. what we see is consumption and services being the drivers of that good growth. we see in the united states, like everywhere, prolonged periods of low interest rates leading to what? more leverage. and that is in the households and corporates. >> do you see that as a vulnerability going forward? >> well, we see this as something to be mindful of

because we cannot make a prediction that there would be never a financial stress. what we see is firms going now more often than not to nonfinancial institutions. that means higher risk. >> less regulation. >> we have to watch it. this is a liability. we also see in the united states room to do more for the poorest americans. i was listening to outside to larry talking about the next generation of policy measures in this administration is to continue. it would be good to target where there could be a boost further in the economy. and i would say last but not least, trade uncertainty. u.s. economy can do better if there is less uncertainty in trade. just to give you the number, we being an institution that loves to wrestle with numbers, we

assessed that trade tensions are costing the world economy $700 billion by next year. more important of the number, more important than the number, is the breakdown. only 1/3 of this number comes from tariffs directly. >> really? >> yes. >> so where are they coming from? >> 63% comes from uncertainty. >> uncertainty? >> uncertainty. and 4% comes from productivity loss. and our expectation is unless they're handled, trade tensions are handled, we would see back on global value chains and more impact on pro ducktistic. so dealing with uncertainty would be really great for growth in the u.s. and elsewhere. >> just to wrap up the u.s., though, are you seeing in the coming year, 2020, a continued slowdown in the u.s. economy or a stabilizing or -- >> our projection is up, it is

2.4% for this year. we see a little bit of slowdown next year but not very much. we see very vibrant consumer demand driven by what we just described. and service is doing quite, quite well. so how would manufacturing be affected next year if we have less trade uncertainty? we can expect a good number there. >> all right. so if we pull back the lens and ask you the same question globally, the imf in october lowered its forecast for global growth to i think 3% this year. what are you seeing in 2020? do you see a rebound? do you see continued slowing? >> for next year we are projecting 3.4%, that is to say a rebound. but we are saying there are

downside risks. the rebound would come from economies that would have particularly slow this year, being at least less slow next year or are rebourchsing. these are countries like aurj tippa, turkey. turkey is doing a little bit better. we also are recognizing that they are a number of bright spots in the world. i really hope people here will pay attention to those. we have 40 economies that are growing 5% or more. >> where are the bright spots, top bright spots for you? >> i would start from asian countries, among them indonesia is the club of 5% or more. asian contributes to global growth 10%. this is just about as much as the eurozone contributes or the u.s. contributes to global

growth. we are a little -- well there are a number of countries in africa that people are not paying enough attention to, but they have ripe for good investments where growth is 7%, 8%, 9%. they have done really well to rebuild their business environment. i just came from senegal, i would put this country in, senegal, kenya, everybody else around, but it's a teeny tiny country. we do see two vul nerkts in the world that we have not seen actually in our october forecast. one is india slowing down a little more than we anticipated. and two, unrest. very clearly people on the street means that economies are slowing down. that is happening in obviously in hong kong, in chile, in colombia, in lebanon. and whether this unrest momentum would be sustained is also a downside risk to that forecast.

>> let's go to the dragon in the room, china, the second largest economy. what are you expecting to see there? as you know, a lot of economists have astributed the global slowdown this year to china's slowdown. china alone during its big, it's double-digit growth years contributed a lot to the global economy. so do you see it stabilizing or slumping more? >> you're absolutely correct, china contributing one-third to the global growth, the numbers slowing down. we expect them to grow at 6.1%. this is still within their forecast. their projection was 6% to 6.5% but on the lower end. for next year we expect them to grow for the first time below, 5.8%. it is partially because of natural process of shifting from

high-speed to high-quality growth, shifting from more import to more domestic. it is partially due to trade tensions. if you look at the numbers i've looked on how trade tensions affect the world economy, china has more of that impact just because it is more export-oriented and in the economy of china, when there is fog on the trade horizon, that means not good news for the numbers. but china does have space to boost its economy. what they're looking into is moderate action on the monetary policy side. stimulus that this time is not going to be infrastructure project. this is what china used to do. boost infrastructure spended spending. now they're more oriented

towards tax cuts as a measure to stimulate, a little bit like what larry was saying about the u.s. and china certainly has a lot of space to boost their service sector by opening up the financial sector. just to tell you, i was in china about a week ago. all the conversations from president xi down to heads of important regulators were about china being determined to open up financial services. very interesting thing, the imf support to the regulatory agencies that are critical in that area. >> gu china also has a debt issue. >> it does. >> and we've reported that the leaders are somewhat reluctant to engage in stimulus because they don't want to feed more debt. they want to curb it. >> tax cuts rather than direct investments as they would have done in the past. they do have a -- they are leveraged like many in this lower-interest rate environment. they're recognizing that one

specific area they need to konst trait on are the small banks that are more vulnerable. they are taking actions in that direction. they also recognize that there has to be state reform. what is happening though is because of uncertainty, which i think is now the new normal, they're a bit more reluctant than they were say a year ago to more aggressively tackle reform. they're saying what would happen if we have workers losing their jobs too rapidly. >> you mentioned india. i wanted to ask you, do you think that we will ever see india sort of taking on the role china has played in recent years? a lot of ceos i know and others around the world look to india as sort of the next remaining big economy that could possibly go into double-digit growth for some period of time? >> they're right to do that because of the bright spots i

talked about, few are large economies are. indonesia is but not many. the answer to your question, yes, india has that potential. south asia, banglar desh, these are countries average age, 27 years. just think of the aging populations of advanced economies and how that is a drag to growth. and we have this huge country. they are mindful that they have to be much more serious around the well thought through and well implemented reforms. and they are looking into a combination to boost investor confidence. will they be the next china? double-digit growth rates? >> a lot of hopes in this room. >> well, i think all we can do is put a very strong prayer and provide them with the best

analytics that they can use to make these prayers come true. >> i know we want to go to questions now. >> questions from the audience on the global economy. martin? >> yeah. you touched on africa, and two things that we've seen in africa that have really limited, one is corruption and the second is political volatility. i think it's 55 or 57, the molecules that move in different directions. and everybody points to the potential. you mentioned young people, aging population, birthrate, bags of potential but it doesn't seem to work. >> well, the point you just made is finally sinking in the minds of a good number of african leaders. i am encouraged by what i hear in kenya, in senegal, in others, a recognition that unless

they're serious about up rooting corruption, never mind what else they do, they would have hard time to attract investors. we also have to recognize that it takes two to tango. if they make efforts to improve investment environment, and yet nothing happens, we may be disempowering the more progressive leadership in africa. so what we are determined to do at the fund is to work harder on providing objective picture of investment conditions in countries in africa, and differentiate between those that are doing well, because you made a very, very important point, it's a big -- with so many countries. those that are doing well and work with the investment community, with people in this room, to create longer-term growth boosting investments on the basis of good governance.