Reportedly, the U.S.-China trade spat will drop down 2019 international growth to its slowest rate as the 2008–2009 financial crisis, the IMF (International Monetary Fund) warned in the last week, adding that the prospect can deteriorate significantly if trade tensions are unresolved. The IMF reported its new WEO (World Economic Outlook) estimations showed 2019 GDP development at 3.0%—which was down by 3.2% in a July projection—largely due to escalating global trade friction. The estimates set a depressing backdrop for the World Bank and IMF yearly meetings in Washington, where Kristalina Georgieva—Managing Director of the IMF—is inheriting an array of problems, from standstill trade to political repercussion in some budding market nations struggling with IMF-instructed austerity programs.
The WEO report elucidates the economic difficulties in detail induced by the U.S.-China tariffs, as well as market turmoil, direct costs, lower productivity, and reduced investment owing to supply chain interferences. The universal crisis lender reported that by the end of 2020, declared tariffs will reduce global economic productivity by 0.8%. In the last week, Georgieva said that this interprets to a loss of $700 Billion. In a statement, Gita Gopinath—IMF’s Chief Economist—added, “The weakness in development is motivated by a sharp decline in global trade and manufacturing activity, with higher taxes and persisted trade policy and demand for capital goods.”
Recently, IMF was in news as its managing director said that the Fund will include climate in the national analysis. Georgieva placed climate change at top on the schedule at this year’s annual summits in Washington, asserting the Fund is preparing to integrate environmental peril in its economic analysis. She added, “The IMF is preparing very rapidly to assimilate climate perils in our surveillance work.”