• 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.