According to the IMF, the latest global economic outlook forecast shows that GDP is expected to grow by 3.0% in 2019, lower than the 3.2% forecast in July, mainly due to the aggravation of the impact of Global trade frictions.
The forecast is a bleak backdrop to this week's annual meeting of the IMF and the world bank in Washington. At the meeting, the new head of the International Monetary Fund, Georgieva, will take over a series of challenges, from trade stagnation to the political rebound of some emerging market countries trapped in the IMF's austerity plan.
The global economic outlook report details the economic dilemmas caused by the Sino US trade war, including direct costs, market turbulence, reduced investment and productivity decline caused by the destruction of the supply chain.
The IMF said the announced tariff measures would reduce global economic output by 0.8% by 2020. Georgieva said last week that this translates into a reduction of $700 billion, equivalent to the size of Switzerland's economy.
"The sharp deterioration of manufacturing activity and Global trade has resulted in weak economic growth, higher tariffs and long-term trade policy uncertainty hurting investment and capital demand," IMF chief economist Gita Gopinath said in a statement.
Mr gopinat said services remained strong in most parts of the world, but there were some signs of weakness in the US and Europe.
According to the IMF, global economic growth is expected to accelerate to 3.4% in 2020, as Brazil, Mexico, Russia, Saudi Arabia and Turkey are expected to perform better. However, this estimate is 0.1 percentage point less than that in July, and is vulnerable to downside risks, including deterioration of trade situation, interference related to recession in the UK, and sudden emergence of risk aversion in financial markets.
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