17.12.201811:36 Forex Analysis & Reviews: What losses Asia has already suffered in a trade war, and how global growth will suffer

The trade war between the United States and China is already affecting business confidence and investment in Asia, an IMF spokesman said, warning the fund could lower its global growth projections in January.

According to the IMF, Japan and South Korea may be among the countries in the region most affected by the trade war, given their dependence on exports to China. Investment is already much lower than expected, the loss of confidence already affects the global economy, especially Asian countries. Global growth noticeably slowed down compared to October forecasts.

Referring to the potential consequences of the Sino-US trade war, the IMF lowered its forecast for global growth in October to 3.7 percent in 2018 and 2019, compared with 3.9 percent in July. Economic growth in Asia is expected to slow to 5.4 percent next year from the 5.6 percent that is projected. There is a possibility that the IMF may lower its forecasts in January, given the signs of a slowdown not only in Asia, but also in Europe and the United States. Uncertainty is so great and means that there is potential for both raising and lowering forecasts. But at the moment the risk of decline is somewhat higher. The IMF noted that China is unlikely to resort to large-scale incentives, given the need to solve long-term problems, such as limiting excess debt.