IMF Alert: Global economy breakup could shrink GDP by 7%

Posted on December 18, 2023   |  

The International Monetary Fund (IMF) issues a caution about the global economy facing fragmentation and changing trade dynamics due to the Ukraine war and US-China tensions.

Possible outcomes include a potential "new Cold War," with estimated losses ranging from 2.5% to 7% of the global gross domestic product (GDP).

Despite no widespread withdrawal from globalization, signs of geoeconomic fragmentation are becoming more apparent, causing concerns.

The IMF highlights the emergence of fault lines in the global economic landscape, stressing the importance of addressing these shifts.

Tensions and conflicts, particularly between the US and China, contribute to the risk of a scenario resembling a "new Cold War," with potential economic impacts.