IMF boss warns of ‘synchronized slowdown’

Kristalina Georgieva

New International Monetary Fund managing director Kristalina Georgieva issued a warning about the state of the global growth on Tuesday.

She warned trade conflicts had thrown global growth into a “synchronized slowdown” and must be resolved. 

In her inaugural speech, Georgieva unveiled new IMF research showing that the cumulative effect of trade conflicts could mean a $700 billion reduction in global GDP output by 2020 — or roughly 0.8%. 

The research takes into account US President Donald Trump’s tariff increases on remaining Chinese imports — about $300 billion worth of goods.

Georgieva said much of the GDP losses will come from a decline of business confidence and negative market reactions.

“In 2019, we expect slower growth in nearly 90 percent of the world,” said Georgieva.

“The global economy is now in a synchronized slowdown.

“This means that growth this year will fall to its lowest rate since the beginning of the decade.”

The Bulgarian economist said trade had “come to a near standstill.” 

She warned that fractures in trade could lead to changes that last a generation, including “broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.