"At 3% growth, there is no room for political mistakes." Unveiling the latest global economic growth forecast for 2019, Gita Gopinath, chief economist of the IMF (International Monetary Fund), urged policymakers to "urgently" reduce trade tensions.
"We welcome all steps towards lower tensions"
The IMF announced on Tuesday that it expects the lowest growth since the financial crisis in 2019, initially blaming the US-China trade war, which is severely undermining international trade and cutting global GDP. 0.8%. The estimates were made before Friday's announcement of an agreement in principle between the world's two largest economies. "We welcome any steps towards lower tensions," Gita Gopinath responded at a press conference.
If the agreement was actually signed, the impact on GDP would be reduced by 0.1 to 0.2 point, she added, while stressing that the decline in confidence, a side effect, would last Longer. The persistence of geopolitical tensions, particularly in the Middle East, the difficult exit of the United Kingdom from the European Union (Brexit) and a manufacturing sector, in particular the automobile sector, at half-mast are the other main risks which led the Fund to lower, for the fifth time in a year, its global growth forecast.
"The global economy is experiencing a synchronized slowdown," Gita Gopinath said, echoing the words of the IMF's new Managing Director, Kristalina Georgieva. And while the recovery was driven by international trade after the 2008 crisis, the volume of goods and services traded will only increase by 1.1% this year, 1.4 percentage points less than expected. the IMF in the summer. This is the smallest increase since 2012 and a fall from 3.6% in 2018.
Washington and Beijing, at the heart of a tariff war unprecedented since March 2018, will both record weaker growth than estimated in July. The US expansion should fall to 2.4% (a revision of -0.2 points from the July forecast) and that of China to 6.1% (-0.1 points). "Trade-related uncertainty has had negative effects on investment" in the United States, the IMF commented. "But employment and consumption remain robust, also supported by stimulus measures," he notes, which allows the world's first economy to pull, for the moment, its pin of the game.
In Italy, GDP stagnates, growth of 0.5% in Germany
"In China, the deterioration of growth reflects not only the rise in tariffs but also the slowdown in domestic demand following measures taken to control the debt," says the institution. At the same time, eurozone countries are struggling with an expected growth of 1.2% (-0.1 points) in 2019.
In Italy, GDP will even stagnate; in Germany, it will grow by only 0.5% (-0.2 points) and 1.2% in France (-0.1 points). "In general, weak exports have slowed euro area activity since the beginning of 2018," said the IMF, which also notes the persistence of the impact of changing pollutant standards in the automotive sector.