US-China's conflict to lower global GDP & restrict foreign investment- IMF

Posted on April 10, 2023   |  

The International Monetary Fund (IMF) alerted, disputes between the US and China can damage the global economy. Foreign direct investment and other capital are heading toward aligned blocks of countries. 

Long-term investments in factories or financial markets began to show the effects of the growing distrust between Washington and Beijing.

The foreign direct investment from Q2 2020 to Q4 2022 fell by 20% from pre-pandemic levels. 

Businesses and policymakers are looking at strategies for moving production processes to reliable countries with aligned political choices to strengthen supply chains.

In January, the IMF estimated that long-term trade disruption, including restrictions on migration, capital flows, and international cooperation, was likely to cut global GDP by 7%.