Global Economy to fall at its lowest rate
The effect will be "more pronounced" in emerging markets like India.
On Tuesday, Kristalina Georgieva, the new managing director of the International Monetary Fund (IMF) during her first speech at IMF headquarters had warned that the global economy is witnessing a "synchronized slowdown" by 90% of the world.
She also added that the effect will be "more pronounced" in emerging markets like India.
In her speech she had explained, "This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade."
Around the world, the effects of trade conflicts would create a loss of $700 billion or 0.8% reduction in GDP output by 2020. "This is approximately the size of Switzerland's entire economy. In this scenario, the whole economy of Switzerland disappears," Georgieva said.
According to the analysis made by Georgieva, the economic activity is softening in advanced economies, such as the US, Japan and, especially, the eurozone, while in other growing markets, such as India and Brazil, the slowdown is even more pronounced this year.
She added that, the accelerated growth of China is experiencing a gradual decrease.
"Even if growth picks-up in 2020, the current rifts could lead to changes that last a generation - broken supply chains, siloed trade sectors, a 'digital Berlin Wall' that forces countries to choose between technology systems," Kristalina Georgieva said.