WASHINGTON — The new head of the 189-nation International Monetary Fund warned Tuesday that the world economy is in the grips of a “synchronized global slowdown” that will result in slower growth for 90% of the world this year.
IMF Managing Director Kristalina Georgieva said that an updated IMF forecast to be released next week will show growth falling to its lowest point since the beginning of this decade.
She blamed much of the slowdown on rising trade conflicts, which she said could mean a loss of around $700 billion in output by the end of next year — 0.8% of world GDP.
“Everyone loses in a trade war,” she said in remarks urging all nations to pull back from the escalating trade wars such as the fight between the United States and China, the world’s two biggest economies.
Georgieva, a Bulgarian economist who had held the No. 2 job at the World Bank, was selected last month to succeed Christine Lagarde, who has been tapped to be the new head of the European Central Bank.
The adverse impacts of the trade battles were already being felt, Georgieva said.
“Global trade growth has come to a near standstill,” she said. “In part because of the trade tensions, worldwide manufacturing activity and investment have weakened substantially.”