IMF warns of effects of trade war

WASHINGTON: The world economy is expected to grow slower this year and experience higher inflation than was visually anticipated, according to new forecasts to be released by the International Monetary Fund that will show the global fallout of the US trade war.

- ALAN RAPPEPORT

The growth projections, to be released early this week, will offer the clearest indication to date of the damage that President Donald Trump’s economic policies are having on global output. Since taking office in January, Trump has imposed a wide range of tariffs on most of America’s trading partners, while ratcheting levies even higher on imports from China, Canada and Mexico.

“Our new growth projections will include more notable markdowns, but not recessions,” Kristalina Georgieva, the IMF managing director, said Thursday in a speech before the spring meetings of the IMF and the World Bank. “We will also see markups to the inflation forecasts for our countries.”

Ms Georgieva’s comments added to a growing chorus of top economic officials, including the heads of the Federal Reserve and the World Bank, who sounded alarms last week about the potential harm Trump’s policies could cause.

The European Central Bank on Thursday lowered interest rates, saying that “the outlook for growth is deteriorating owing to rising trade tensions.” Central bankers, finance ministers and other policymakers will gather in Washington this week as they continue to grapple with how to respond.