Global GDP may shrink by half a percent or $ 455 billion in 2020 as a result of the trade wars the United States is waging with China and the rest of the world, the International Monetary Fund (IMF) said.
“The principal threat stems from continuing trade tensions,” said IMF Managing Director Christine Lagarde in a statement.
She added that the US-China tariff war could "leave a serious dent" in the global economy.
The statement notes that "decisive measures" are needed to help prevent the global economy from sliding into a new crisis.
In January, the IMF forecast global economic growth for 2019 and 2020 at about 3½ percent - less than in the recent past, but still quite good.
If a sharper than expected tightening of financial conditions occurs, it will create serious problems for many governments and companies in terms of refinancing and debt servicing, which could exacerbate exchange rate fluctuations and adjustments in the financial market.
Lagarde took part in a two-day meeting of G20 finance ministers and central bankers in Fukuoka, Japan.
The final statement from the meeting noted: “Most importantly, trade and geopolitical tensions are becoming more serious,” and it also indicated that participants “are ready to take further action if necessary.”
At the same time, according to informed sources, the last wording was softened at the insistence of the American side, initially it sounded like the existing "urgent need to resolve trade frictions."
However, US Treasury Secretary Stephen Mnuchin said he disagreed with the findings of the final statement and Lagarde's statement.
“It is clear that there is a slowdown in the economy in Europe, a slowdown in China, a slowdown in other parts of the world. I don’t think this is a consequence of trade tensions. This slowdown began last year, ”Mnuchin told reporters.
He confirmed that US President Donald Trump and Chinese President Xi Jinping should meet at the G20 summit, which will be held in Osaka, Japan on June 28-29.
