Trade war could trigger sharp global slowdown

DAVOS: The International Monetary Fund on Monday cut its world economic growth forecasts for 2019 and 2020 due to weakness in Europe and some emerging markets, and said failure to resolve trade tensions could further destabilise a slowing global economy.

The IMF predicted the global economy to grow at 3.5 per cent in 2019 and 3.6pc in 2020, down 0.2 and 0.1 percentage point respectively from last October’s forecasts.

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde told a briefing.

The new forecasts, released on the eve of this week’s gathering of world leaders and business executives in the Swiss ski resort of Davos, show that policymakers may need to come up with plans to deal with an end to years of solid global growth.