Trade Wars, US problems, and IMF Forecasts

25 juin 2020

The main event of yesterday can be considered the publication of the IMF updated forecasts on the economic growth in the world in 2020. As expected, forecasts were revised downward.

A decline in global GDP is now projected at 4.9 percent in 2020 (1.9 percentage points worse than the April forecast). In general, according to the IMF, the COVID-19 pandemic has done bigger negative impact on activity in the first half of 2020 than anticipated, and recovery is projected more gradual than previously expected.

Among other news, it is worth noting information that the United States can set new tariffs for European exports in the amount of $ 3.1 billion. That is, the markets did not have time to breathe out after statements by the White House adviser that the trade agreement between the USA and China is over, and they have another blow. But this time it is a new front in trade wars. Obviously, such a move by the United States will provoke a symmetrical response from the EU with all the ensuing.

In general, one more reason to worry about the future of the global economy.

The news about the pandemic this week are extremely negative: the outbreak of diseases in Germany, the growth of new cases in the US and the country's inability to leave the plateau of diseases.

As for the positive, we can note the latest information from the Ifo Institute, which demonstrated that business expectations in Germany have been rising for the second month in a row. On the other hand, this news was offset by a survey of employers in the UK, which showed that a quarter of workers are likely to lose their jobs after returning from forced leave when state support ends in September.