The global economy will lose about $700 bln or about 0.8% of world GDP by 2020 due to global trade conflicts, while the growth of world trade has almost stopped, IMF Managing Director Kristalina Georgieva said on Tuesday, ONA reports citing Bloomberg.
In late September, the Executive Board of the International Monetary Fund (IMF) selected Kristalina Georgieva to serve as IMF Managing Director and Chair of the Executive Board for a five-year term starting on October 1, 2019.
"For the global economy, the cumulative effect of trade conflicts could mean a loss of around $700 billion by 2020, or about 0.8% of GDP," she said adding that the "global trade growth has come to a near standstill," Georgieva said.
"We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll," the head of the IMF added.
Georgieva called on the global community to "work together, now, and find a lasting solution on trade."
"Countries need to address legitimate concerns related to their trade practices. That means dealing with subsidies, as well as intellectual property rights and technology transfers," she said.
"We also need a more modern global trading system, particularly to unlock the full potential of services and e-commerce," she stated added that "the key is to improve the system, not abandon it."
Currently, the most acute trade conflict is the dispute between the United States and China. Over the past year, they have repeatedly imposed customs duties against each other.
US President Donald Trump is trying to reduce the trade deficit, while China disagrees with Washington’s policies and responds with similar measures.
In 2018, the United States introduced customs duties on imports of steel and aluminum, which caused sharp criticism, in particular from Washington’s allies in Europe.