Tensions between the U.S. and China are leading to a “disintegration of the world” and the transfer of production to friendly countries, which could cause short-term damage to the global economy as much as 1% of global GDP in five years and 2 % in the long run according to International Monetary Fund (IMF) experts. Web site stock article.
Experts believe that a fragmented world will likely make it poorer. However, they noted that there may be relative benefits to relocation, subject to considerable uncertainty.
According to Bloomberg, this risk analysis was one of the “highest-profile” analyzes since the coronavirus pandemic that spoke of global economic damage.
The fund also pointed out that growing distrust between the US and China could affect the banking system as well – failures in supply chains and commodity markets slow domestic economic growth and increase inflation.
Kristalina Georgieva, former head of the International Monetary Fund statedthat the world economy will continue to be in “turbulence” by going through “shock after shock” at the end of the current year.