Kristalina Georgieva says trade tensions ‘substantially weakened’ manufacturing and investment activity worldwide.
Much of the GDP losses will come from a decline of business confidence, productivity losses from broken supply chains and negative market reactions, she said. The Bulgarian economist, a former European Union official who previously held the No. 2 job at the World Bank Group, said trade growth had “come to a near standstill.”
In calling for countries to work together to revise global trade rules to make them sustainable, she referenced frequent complaints about China’s trade practices, without specifically naming the country. If a synchronised slowdown in world economies worsens, she said, the world may need a “synchronised policy response” along the lines of stimulus efforts enacted during the 2008-2009 financial crisis.