IMF Director of Communications Gerry Rice warned yesterday that US-China trade tensions are starting to affect the world economy. He said they’re “not only a threat, but are actually beginning to weigh down the dynamism in the global economy.” And, the already imposed tariffs could “potentially reduce the level of global GDP by 0.8 per cent in 2020, with additional losses in future years”. The 0.8% figure suggested more serious impact of prior estimation of 0.5% by IMF.
World economic activity remained subdued, with trade and geopolitical tensions causing uncertainty and eroding business confidence, investment and trade, he said. Though, a global recession is not in IMF’s baseline for the moment. He added that had used words such as “very precarious”, “very fragile” and “delicate” to describe the economic outlook. And, “Let’s not get ahead of ourselves. Let’s wait and see.” IMF is scheduled to release updates on economic outlook next month.
