Brexit poses longer-term growth concerns: Obama

US President Barack Obama speaks about Brexit at the Global Entrepreneurship Summit at Stanford University in Palo Alto, California, on June 24.
US President Barack Obama speaks about Brexit at the Global Entrepreneurship Summit at Stanford University in Palo Alto, California, on June 24. PHOTO: REUTERS

OTTAWA • US President Barack Obama said he expects the world economy to be steady in the short run after Britain's decision to leave the European Union but expressed concern about longer-term global growth.

Appearing at a North American summit with the leaders of Canada and Mexico, Mr Obama said there have been reactions in markets, stock prices and currencies since last Thursday's Brexit vote.

Preparations by central banks, finance ministers and the US treasury secretary have helped to ensure that the global economy will hold steady in the short term, he said at a news conference on Wednesday.

"I think there are some genuine longer-term concerns about global growth if in fact Brexit goes through and that freezes the possibilities of investment in Great Britain or in Europe as a whole," Mr Obama said. "At a time when global growth rates were weak already, this doesn't help."

The US President, who had openly sided with British Prime Minister David Cameron against Brexit, said the leaders of the G-20 nations, who are meeting in China this year, will have to work to boost global demand and fortify the global economy.

Mr Obama said that, while the special relationship between Britain and the United States will endure, Britain's absence from the EU will "make it harder for us to solve some of the other challenges that have to be solved".

The President said his main message to Mr Cameron, German Chancellor Angela Merkel and other leaders involved in Brexit would be: "Everybody should catch their breath, come up with a plan and a process that is orderly, that's transparent, that people understand and then proceed, understanding that both sides have a stake in getting this right.

"And I think that will be a difficult, challenging process but it does not need to be a panicky process."

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 01, 2016, with the headline 'Brexit poses longer-term growth concerns: Obama'. Print Edition | Subscribe