IMF deputy head warns world to avoid global trade war
Published On Oct 23, 2024, 9:42 PM
The IMF warns that the global economy could contract significantly (up to 7%) if major economies engage in a broad-based trade war, particularly citing potential tariffs from the U.S. under Trump’s administration. This could equate to losing the size of both the French and German economies. Additionally, the IMF emphasizes the need for governments to rebuild fiscal buffers in anticipation of future economic crises and highlights the recent soft landing of the world economy from inflation without a major increase in unemployment.
Stock Forecasts
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Given the potential escalation of tariffs and trade tensions, sectors particularly exposed to trade (like manufacturing and consumer goods) may see increased volatility. Companies heavily reliant on imports or exports could face margin pressures due to tariff increases. Investors might consider reducing exposure to these sectors until there’s further clarity.
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