The International Monetary Fund (IMF) Crisalina Georgieva, President of the International Trade Fund (IMF), warned that trade disputes are undermining the global economy.
The head of the IMF, Kristalina Georgieva, gives a curtain fundraising speech that previews key issues to be addressed at the annual meeting in Washington, DC on October 8, 2019.
(AFP)
Conflict trade disputes, the new head of the International Monetary Fund, are weakening the world economy. [IMF] Said on Tuesday.
Studies show that the impact of trade disputes is widespread and the state should be prepared to respond with cash infusion, Kristalina Georgieva, IMF's executive director, said in his first speech.
She also called for a surge in carbon taxes to address climate change, another challenge facing the global economy.
Georgieva said in a speech ahead of the IMF-World Bank fall meeting next week: "In 2019, we expect almost 90{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} growth to slow. The global economy is currently slowing."
"This widespread slowdown means this year's growth will drop to the lowest rate since the beginning of ten years."
Trade war
She said the IMF is lowering growth prospects for this year and next. Previously, the global economy was expected to grow 3.2{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} in 2019 and 3.5{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} in 2020.
The fund will release details in the updated World Economic Outlook on October 15.
She said that while trade tensions have been mentioned as a danger to the economy, "now we are seeing them actually being harmed."
"Global trade growth is near stagnant."
For the global economy, the cumulative effect of trade conflict could mean a loss of about $ 700 billion or about 0.8{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of GDP by 2020, which is much higher than the fund predicted by the worst case scenario, she said.
"It's the size of Switzerland's entire economy," she said.
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According to the IMF survey, secondary effects of trade wars, such as loss of confidence and financial market reactions, are much greater than the direct economic impact of tariffs.
Georgieva said in a forum after the speech that it was a "really indirect influence" on the trade war.
"It's hard to regain confidence once weakened," she warned.
"We are already stepping on it."
Source: AFP
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