Investors aren’t the only ones looking closely at the U.S.-China trade war as the world authority on finances, the International Monetary Fund (IMF), is keeping a close watch on negotiations. If the trade war remains unresolved, the IMF is predicting that global growth will decline to its lowest level since the financial crisis in 2008.
Per the IMF’s most recent World Economic Outlook projection, it reveals that 2019 GDP will grow at a rate of 3.0%, which is less than the 3.2% projection in July. This doesn’t bode well for the IMF’s new managing director Kristalina Georgieva who will need to tackle a bevy of economic issues.
Per a CNBC report, the IMF said “that by 2020, announced tariffs would reduce global economic output by 0.8%. Georgieva said last week that this translates to a loss of $700 billion, or the equivalent of making Switzerland’s economy disappear.”
“The weakness in growth is driven by a sharp deterioration in manufacturing activity and global trade, with higher tariffs and prolonged trade policy uncertainty damaging investment and demand for capital goods,” IMF Chief Economist Gita Gopinath said in a statement.
IMF’s World Economic Outlook, Oct 2019
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