WASHINGTON, Global economy is decelerating and nearly 90 percent of the world economies are expected to record slower growth in 2019, the new International Monetary Fund chief has warned.
“In 2019, we expect slower growth in nearly 90 percent of the world,” IMF Managing Director Kristalina Georgieva said in speech at an event in the IMF headquarters in Washington on Tuesday.
“The global economy is now in a synchronized slowdown.” She explained that this widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade.
Georgieva cautioned that there are growing fractures in the global economy that could have long-term effects.
“The current rifts could lead to changes that last a generation – broken supply chains, siloed trade sectors, a digital Berlin Wall that forces countries to choose between technology systems,” she said.
She signaled trade war as one of the major fractures, noting that it had put a brake on the world trade growth.
“We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll. Global trade growth has come to a near standstill.
“For the global economy, the cumulative effect of trade conflicts could mean a loss of around USD 700 billion by 2020, or about 0.8 percent of GDP,” she pointed out.
Georgieva called on policymakers to build a better trade system that addresses current loopholes and helps unlock the full potential of services and e-commerce.
“We need to work together, now, to find a lasting solution on trade… Countries need to address legitimate concerns related to their trade practices. That means dealing with subsidies, as well as intellectual property rights and technology transfers. We also need a more modern global trading system, particularly to unlock the full potential of services and e-commerce. The key is to improve the system, not abandon it.”
Source: Kuwait News Agency