Prelims level : International Mains level : Effect of policies and politics of developed and developing countries on India’s Interests, Indian Diaspora
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  • The ongoing U.S.-China trade war escalation could knock off 0.4 percentage points from world GDP growth by 2020, and possibly lead to the lowest growth since 2009, according to Fitch Ratings.
  • The imposition by the U.S. of 25% tariffs on the remaining $300 billion of imports from China would reduce world economic output by 0.4 percentage points in 2020.
  • Global GDP growth would slow to 2.7% this year and 2.4% next year, compared with our latest ‘Global Economic Outlook’ baseline forecasts of 2.8% and 2.7% respectively.
  • Global Economic Outlook: A Survey by the IMF staff usually published twice a year. It presents IMF staff economists’ analyses of global economic developments during the near and medium term.
  • For China and the U.S., the tariffs would initially feed through to lower export volumes and higher import prices, with the latter raising firms’ costs and reducing real wages.
  • These effects are expected to spill over to other trading partners not directly targeted by the tariffs.
  • While falling short of a global recession, this would be the weakest global growth rate since 2009 and slightly worse than 2012, when the Eurozone sovereign debt crisis was at its peak.
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