IMF warns trade war may affect economy during a generation

In a context of political uncertainty and economic recension, the managing director of the International Monetary Fund (IMF), has warned about the effects of trade war, Brexit and geopolitical tensions, are holding back economic potential.

 “Even if growth picks-up in 2020, 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.” has stated the executive.

“Current rifts could lead to changes that last a generation”

In fact, tensions between two of the biggest economic powers are affecting already global economy. According to the executive of the IMF, the cumulative effect of trade conflicts could mean a loss of around 700 dollars billion by 2020, or about 0.8% of GDP.

In its speech, the successor of Christine Lagarde aimed for a more modern global trading system and has mentioned the importance of central banks to fulfill their mandates under difficult circumstances. The executive pointed that in 2019, they expect a slower growth in nearly 90% of the world.