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World economy is robust though trade war threatens slowdown

The world economy is going to advance in 2018, growing at the top rate since 2010, however, trade protectionism can easily make it lose vigour, according to recent Reuters polls of more than 500 analysts from various countries.

Potential spiraling of a trade conflict between the U.S. and China might restrain the economic traction catalyzed by long period of policy stimulus, which was the primary concern of polled finance experts.

Analysts at CA-CIB said that they believed the possibility of an inevitable outright trade war was limited, but growing protectionism is at the moment the biggest threat to the world economy.

Besides, protectionist policy has raised more and more worries during last 3 months, they also said. Nevertheless, global expansion is expected to be at around 3.8% in the current year, the maximum since the start of surveys for the period at the end of 2016. It would also be the quickest growth rate since 2010 with its 4.3%.

The latest forecast was below the IMF’s estimate of 3.9%. But the Fund pointed to the risk of trade conflicts to global expansion as well. Trade tariffs introduced by the U.S. and China would barely harm world trade, but growing tensions might send financial markets in an uproar.

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