It is in both the U.S. and China’s best interest to reach a trade deal, according to IMF Managing Director Kristalina Georgieva. Here’s what she had to say about the “synchronized slowdown” of the global economy.
The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned on Tuesday, adding that the outlook could darken considerably if trade tensions remain unresolved.
The World Economic Outlook report spells out in sharp detail the economic difficulties caused by the U.S.-China tariffs, including direct costs, market turmoil, reduced investment and lower productivity due to supply chain disruptions. Services were still strong across much of the world, but there were some signs of softening in services in the United States and Europe, Gopinath said.
Global vehicle purchases fell by 3% in 2018, reflecting a drop in demand in China after expiration of tax incentives and production adjustments after adoption of new emissions standards in Germany and other eurozone countries. Trade growth was expected to rebound to 3.2% in 2020, however risks remained "skewed to the downside," the IMF said, with a significant drag on both the U.S. and Chinese economies.New IMF projections show China's GDP output falling 2 percent in the near term under the current tariff scenario and 1 percent in the long term, while U.S. output would decline 0.6 percent over both time spans.
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