The International Monetary Fund (IMF) has reduced its estimates for global economic growth this year to the lowest level since the 2008-2009 global financial crisis, with the trade war consequences between China and the United States being the cornerstone of this decline.
In its Outlook report released on Tuesday, the IMF lowered its forecast for global economic growth to 3 percent in 2019, down from the 3.3 percent forecast in the April report and 3.2 percent in the July report.
However, the IMF expects economic growth around the world to accelerate to 3.4 percent in 2020, although these estimates are about 0.2 percent lower than earlier projections.
They also lowered forecast for U.S. economic growth by about 0.2 percent to 2.4 percent this year, but raised its 2020 estimate by a similar 0.2 percent to 2.1 percent.
China’s economic growth estimates were revised dower by 0.1 percent to 6.1 percent in 2019 and by 0.2 percent to 5.8 percent in 2020.
The Washington-based fund has explained that U.S.-China tariffs would reduce world economic output by 0.8% percent or $700 billion by 2020.
The IMF said trade growth is expected to rise to 3.2 percent in 2020, but risks remain "side-by-side," with a major constraint on both the U.S. and China's economies.