BEIJING – The International Monetary Fund warned on Thursday that the world is facing a synchronized economic slowdown stemming from factors such as trade tensions between China and the United States and resulting uncertainties.
At a press conference following Thursday’s 1+6 roundtable meeting in Beijing, which involved Chinese authorities and various international economic institutions, new IMF Managing Director Kristalina Georgieva said that global growth is projected at only 3 percent in 2019, the slowest in a decade.
The Bulgarian recalled that the growth of 90 percent of the world’s GDP has slowed down in the past year in contrast to two years ago when 75 percent of the global economy experienced an upswing.
According to Georgieva, losses for the global economy due to the China-US trade war will amount to $700 billion by 2020, 0.8 percent of the world’s GDP.
“We should move from trade truce to trade peace,” she urged.
According to Georgieva, the current situation – which could worsen depending on the outcome of the United Kingdom’s exit from the European Union – increases financial vulnerability and poses long-term challenges such as income inequality, demographic and regional disparities.
The IMF chief warned that these issues “will continue to weigh on growth unless they are quickly addressed.”
World Bank President David Malpass highlighted the potential of structural reforms for China but also warned that the country’s economy is facing debt and structural limitations, which will make new growth engines necessary.
Also present at the meeting was Chinese Prime Minister Li Keqiang as well as representatives from the World Trade Organization, the International Labour Organization, the Organization for Economic Cooperation and Development and the Financial Stability Board.