China trade war and Brexit threaten global growth says International Monetary Fund

Hannah Rogers
October 13, 2018

With much of the US-China tariff war's impact to be felt next year, the Fund cut its 2019 US growth forecast to 2.5 per cent from 2.7 per cent previously, while it cut China's 2019 growth forecast to 6.2 per cent from 6.4 per cent.

The UK economy is expected to grow by 1.4% this year - down from April's prediction of 1.6% - while predicted growth for 2019 remains at 1.5%, a slowdown from 1.7% in 2017.

The IMF expects the USA economy to grow 2.9 per cent this year, the fastest pace since 2005 and unchanged from the July forecast.

In its World Economic Outlook report released in July 2018, the Bretton Wood Institution had projected that Nigeria's economy would grow by 2.1% in 2018 and 2.3% in 2019. The number is the same as last year's 3.7 percent growth.

"The possibility that China and USA resolve their disagreements would be a significant upside to the forecast", Obstfeld said.

The global organisation warned a full-blown trade war between the U.S. and China could have wider implications for the financial growth around the world. These were reduced by 0.2 and 0.4 percentage points for this year and next, partly as a result of higher interest rates making these nations' debts more costly to service.

"The possibility that China and United States resolve their disagreements would be a significant upside to the forecast", he added.

New Global Report Warns Of Climate Change Consequences
The planet is already two-thirds of the way there, with global temperatures having warmed about 1 degree Celsius. Currently, the world has seen 1C of warming over the past 115 years, according to a USA report last year .

The IMF's latest Global Financial Stability report said near-term risks had increased over the past six months but added investors were "complacent" to the potential for a market correction.

With all these factors combined, growth in Asia could drop by up to 0.9 points over the next couple of years, the International Monetary Fund estimated. "Any sharp reversal for emerging markets would pose a significant threat to advanced economies, as emerging market and developing economies make up about 40% of world GDP".

The more pessimistic forecast comes as the clash between Washington and Beijing threatens to keep escalating and cause damage in other countries. The Trump administration has penalized almost half of all imports from China and has threatened more for the other half.

However, in a newspaper article, the country's former ambassador to the World Trade Organisation Manzoor Ahmad said China only accounted for 10 per cent or so of Pakistan's loan repayments.

Yi also expressed his confidence in the progress of this campaign to reduce financial risks. Angola, contracting by 0.1% this year.

Donald Trump's trade war with China will cost Australians billions of dollars in lost economic growth, with the International Monetary Fund downgrading forecasts because of growing tariff barriers.

Washington has also imposed tariffs on steel and aluminium, citing national security concerns, and has also warned it could impose a 25% levy on imported cars and vehicle parts.

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