The International Monetary Fund (IMF) has warned today that escalating trade tensions could harm global economic growth, for the second time they have downgraded their forecasts.
October 2018, the IMF downgraded growth forecast from 3.7% to 3.5% in 2019 and has now announced its 2020 prediction fell by 0.1% to 3.6%.
UK growth has been predicted at 1.5% for this year and 2020, however they have also said there is a lot of uncertainty over this growth prediction.
The IMF said, “The main shared policy priority is for countries to resolve cooperatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers further and destabilising an already slowing global economy.”
Gita Gopinath, the IMF’s chief economist said, “While financial markets in advanced economies appeared to be decoupled from trade tensions for much of 2018, the two have become intertwined more recently, tightening financial conditions and escalating the risks to global growth.
“The global expansion is weakening and at a rate that is somewhat faster than expected.”