The International Monetary Fund, IMF has expressed concern over the rise in trade uncertainty in Nigeria and many other economies amid the escalating trade tensions between the United States and China.
The IMF said on Monday that rising trade uncertainty was cited as a driving factor for “sluggish global growth” in the current issue of its World Economic Outlook, which described the state of the world economy.
While unveiling a new index that tracks trade uncertainty across 143 countries, the Washington-based Fund described the World Trade Uncertainty Index as “the first effort to create a trade uncertainty index for a large set of advanced and developing economies.
The Index shows increased uncertainty starting around the third quarter of 2018, coinciding with tariff increases by the US and China. It then declined in the 4th Quarter of 2018 as both countries announced a deal to halt the escalation of tariffs in December.
It, however, significantly spiked again in 1st Q 2019, following a substantial expansion of tariffs.
Based on the fund’s estimates, the increase in trade uncertainty observed in the 1st Quarter of 2019 could be enough to reduce global growth by up to 0.75 percentage point in 2019.