Trade War casts shadow at the World economic prospects – IMF

-October 9, 2018

The trade war between the United States and China casts a shadow over the economic outlook in the world. Due to the many import duties raised, the International Monetary Fund (IMF) reduced its growth estimates for the US and China. The forecast for the global economy as a whole is also lower.

The think tank now expects 2.5 percent growth in the US and 6.2 percent growth in China next year. In July, the IMF still assumed a score of 2.7 and 6.4 percent. The estimates for this year have not changed. The global growth estimate of the IMF has been reduced for both 2018 and 2019: for both years from 3.9 to 3.7 percent.

IMF economist Maurice Obstfeld has the impression that a number of dangers that the IMF has already warned about are now becoming reality. He finds the economic climate more uncertain. According to him, in various major economies, growth is being pushed forward by policies that can not be sustained in the long term.

The IMF has also become less positive about the Belgian economy. Whereas in April the institution still took into account a growth of 1.9 percent this year and 1.7 percent next year, this has now become 1.5 percent for both years.

From Indonesian Bali, where the credit fund holds a large meeting this month, Obstfeld is also somewhat gloomier about the image in emerging markets. He noted that crises in countries such as Turkey and Argentina could also pose a threat to the global economy as a whole. Furthermore, the top economist points out the risks surrounding the high debt levels throughout the world.

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