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IMF warns of potential 'severe' global damage from Brexit

TheIMF warned in its latest world economic outlook report published April 12 thatthe U.K. leaving the EU could do "severe regional and global damage"by disrupting established trading relationships.

TheIMF also cut its baseline projection for global growth in 2016 to 3.2%, broadlyin line with 2015, and down 0.2 percentage point from the last projection inJanuary. Although global recovery continues, it does so at an"ever-slowing and increasingly fragile pace" amid increasingfinancial turbulence, the IMF said.

Therecovery is projected to strengthen in 2017 and beyond, driven primarily byemerging market and developing economies, as conditions in stressed economiesstart gradually to normalize. The IMF noted, however, that uncertainty hasincreased and risks of weaker growth scenarios are becoming more tangible.

"Thefragile conjuncture increases the urgency of a broad-based policy response toraise growth and manage vulnerabilities," the IMF said, noting that furtherfinancial reforms, including the resolution of impaired assets still held onbanks' balance sheets, would enhance not only financial stability, but also thetransmission of monetary and fiscal policy.