IMF: Trade fight, greatest near-term risk to global growth
Reuters |
Updated: 2018-07-17 17:33
Escalating and sustained trade conflicts following US tariff actions threaten to derail economic recovery and depress medium-term growth prospects, the International Monetary Fund warned on Monday, Reuters reported.
Sketching out potential damage from the full brunt of US President Donald Trump's tariff threats and subsequent retaliation from trading partners, the IMF said that if realized, these could reduce annual global economic output by 0.5 percent from projections for 2020.
That translates to nearly $500 billion in lost annual output based on IMF projections, the equivalent of subtracting an economy the size of Thailand.
"The risk that current trade tensions escalate further with adverse effects on confidence, asset prices and investment is the greatest near-term risk to global growth," IMF Chief Economist Maury Obstfeld told a news conference, noting that US trade deficits are likely to grow due to high demand, possibly inflaming trade tensions further.
Escalating and sustained trade conflicts following US tariff actions threaten to derail economic recovery and depress medium-term growth prospects, the International Monetary Fund warned on Monday, Reuters reported.
Sketching out potential damage from the full brunt of US President Donald Trump's tariff threats and subsequent retaliation from trading partners, the IMF said that if realized, these could reduce annual global economic output by 0.5 percent from projections for 2020.
That translates to nearly $500 billion in lost annual output based on IMF projections, the equivalent of subtracting an economy the size of Thailand.
"The risk that current trade tensions escalate further with adverse effects on confidence, asset prices and investment is the greatest near-term risk to global growth," IMF Chief Economist Maury Obstfeld told a news conference, noting that US trade deficits are likely to grow due to high demand, possibly inflaming trade tensions further.
