US-China trade war casts long shadow over IMF meeting
Delegates to annual summit in Bali express concern about impact of conflict between the world’s two largest economies
Anxiety about the outlook for the global economy ran high at the meeting of global financial policymakers in Indonesia this week, given uncertainties about how far the US-China trade war would escalate and how long it would last.
Officials and their advisers attending the annual meetings of the International Monetary Fund and World Bank in Bali admitted that the unprecedented nature of the trade conflict took policymakers deep into uncharted territory in terms of predicting its economic impact, both short-term and long-term.
In general, officials emphasised that the global economy remains strong, with the IMF predicting healthy global growth of 3.7 per cent both this year and next, with the 2018 forecast revised down a mere 0.2 percentage points from the previous prediction in July, largely due to the trade war.
But then came the warnings.
Global growth appears to have plateaued and the world is facing a series of significant “headwinds”, including the trade war but also the impact of US Federal Reserve interest rate rises and higher oil prices.
Rhee Chang-yong, head of the IMF’s Asia-Pacific department, said he was worried about a combination of the three risks materialising at the same time.