The Trade War Between US and China Taking a Knell on Global Growth : IMF

Proclaiming that the trade war between the US and China was taking a knell and also pushing the global markets to the struggle conditions for stiff liquidity and capital streaming.

The new prophecy declared on the resort island of Indonesia and Bali where the annual meetings of world bank and IMF are getting lowering, showing that a hit of strong growth which is enriched partially by US tax cuts and the escalating demand of imports.

According to the update of IMF to its World Economic Outlook which is now forecasting 3.7% international growth in between 2018 and 2019, lower from the 3.9% growth as per July forecast for both years.

The underestimation reflects a convergence of factors , including the initiation of import tariffs between China and United States and also the feeble performances  by eurozone countries such as Japan , Britain and escalating interest rates that are following some visible markets with capital streaming , most remarkably, Brazil, South Indonesia,Africa ,  Mexico, Argentina and Turkey.

Maurice Obstfeld, the chief economist of IMF said, “ US growth will decline once parts of its fiscal stimulus go into reverse. Notwithstanding the present demand momentum, we have downgraded our 2019 US growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China’s retaliation.”

Obstfeld said, “But there was no denying that the susceptibility to large global shocks has risen. Any sharp reversal for emerging markets would pose a significant threat to advanced economies. ”

He also said, “ Where are we now is we have gotten some bad news. The probability that we would attach to the farther bad news has gone up”.

by Haimantee Ghosh on October 10, 2018

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