The US is confronting an increased risk of recession as Donald Trump’s trade war pushes the global economy into a “significant slowdown”, the IMF has warned, with the fund’s top economist defending the Federal Reserve’s policy on interest rates.
In its latest World Economic Outlook, the fund lopped nearly a percentage point off its growth forecast for the US this year and downgraded its outlooks for all other G7 nations, as well as major economies including China, India, Brazil and South Africa.
Countries needed to “urgently resolve” their trade tensions to avoid further damage to growth prospects, the fund said. “If sustained, this abrupt increase in tariffs and attendant uncertainty will significantly slow global growth.”
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