IMF Could Cut Further Its Growth Forecasts
The International Monetary Fund says that the trade tensions are already affecting confidence and investments globally and business confidence and investment in Asia. Japan and South Korea could be among countries in Asia hit the hardest by the trade war given their reliance on exports to China. "Investment is much weaker than expected. My interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies," Changyong Rhee (director of the IMF's Asia and Pacific Department) said.
The IMF had said that the trade war between China and US will create repercussions to growth for both countries, and they will both see a slower growth outlook for next year as compared to this year.
The IMF has already cut its global growth forecast in October to 3.7% for both 2018 and 2019, down from 3.9% projected in July. It also expects Asia's economic growth to slow to 5.4% next year from 5.6% projected this year.
Changyong Rhee also said there was a chance the IMF could cut further its growth forecasts when it reviews them in January, given signs of slowdown not just in Asia but in Europe and the United States.