IMF warns of severe consequences of trade disputes

(VOVWORLD) - The IMF downgraded its forecast for world growth last month, and recent data suggest the outlook has grown worse since then, the fund said Wednesday in report ahead of the Group of 20 leaders’ summit this week in Buenos Aires.

Financial conditions have tightened, especially in emerging markets, while trade tensions have increased, said the Washington-based fund. Europeans in particular, though shaken by Brexit and the rise of populism, will try to defend the credo of multilateralism that led the G20 leaders to meet for the first time ten years ago, in the midst of a financial storm.

Earlier, US President Donald Trump openly threatened its trading partners, including the European Union, taxes on the automotive industry, a crucial link in international trade. Due to this, the IMF estimates that in the short term, global GDP could be reduced by 0.75% due to increased trade tensions.