World

The IMF assessed the possible losses of global GDP due to economic fragmentation



In the modern scientific community, there is no consensus on the consequences of the fragmentation of the global economy for world GDP; the decline, according to various sources, could range from 0.2% to 12% of GDP. This is stated in the October report International Monetary Fund (IMF).

“Estimates of long-term output losses due to restrictions on the international flow of goods and services, finance and technology range from 0.2% to 12% of global GDP,” the report says.

The IMF report notes the fragmentation of the main commodity markets against the backdrop of the special operation in Ukraine and the subsequent sanctions. According to analysts, further deepening of this process due to geopolitical tensions will lead to greater volatility in commodity markets, and the consequences for different countries will be very unequal. Thus, low-income countries will bear a disproportionate share of the costs due to their high dependence on agricultural imports.

In the spring, the IMF presented a report in which it described five scenarios for the fragmentation of the world economy: “strategic separation”, “geoeconomic fragmentation”, as well as three additional ones, which are implemented in the event of the introduction of severe restrictions on trade in energy resources, high-tech products or agricultural goods. The fund considers the first two options to be the main ones, wrote then Vedomosti. The fragmentation of the global economy into opposing blocs, according to the IMF, can reduce global GDP by 0.3 to 2.3% over a horizon of 7–10 years.

In September, at the UN General Assembly, Secretary General of the world organization Antonio Guterres warned about the world approaching a large-scale split in the economic and financial systems against the backdrop of deepening contradictions among economic and military forces, between North and South, East and West.

At the end of March, the World Bank presented a report stating that by 2030, global economic growth will decline to its lowest level in 30 years. The organization said the economy faces a “lost decade.” They expect average potential GDP growth to fall by about a third from the rate that prevailed in the first decade of this century, to 2.2% per year.

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