Washington, Oct 8: New International Monetary Fund Managing Director Kristalina Georgieva warned about the impending “synchronized slowdown”in global growth due to trade conflicts between the countries and said it must be resolved.
“Trade disputes are undermining the global economy, which is set to see its slowest growth in nearly a decade.In 2019, we expect slower growth in nearly 90 percent of the world. The global economy is now in a synchronized slowdown,” Georgieva said in a speech ahead of IMF-World Bank autumn meetings next week.
The cumulative effect of trade conflicts could mean a loss of around $700 billion by 2020, or about 0.8 percent of GDP, she said, which is far higher than the fund previously forecast as its worst case scenario.
She raised the issues which are also central to the U.S. demands about addressing legitimate concerns such as unfair trade subsidies and inadequate protection of intellectual property rights and technology transfers.
Indirectly pointing to the US-China trade war,the new head of the 189-nation International Monetary Fund urged nations to pull back from the escalating trade wars as “Everyone loses in a trade war.”
President Donald Trump has insisted that the U.S. economy has not been affected by the higher tariffs imposed on China and other nations, which have triggered retaliatory tariffs on U.S. goods.
Even if growth picks up in 2020, the current rifts could lead to changes that last a generation — broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” she said.