IMF marks up China growth, warns of protectionism

The International Monetary Fund on Tuesday marked up China's economic growth for 2018 and 2019 both by 0.1 percentage point from its forecast last October, and warned of the risk of an escalating cycle of trade restrictions and retaliation.

Maurice Obstfeld, Chief Economist at the International Monetary Fund [Photo: China Plus/ Zhao Xinyu]

China's economy is expected to grow 6.6 percent in 2018 and 6.4percent in 2019, according to the IMF World Economic Outlook. The global economy is expected to grow 3.9 percent in the coming two years, both up 0.2 percentage points from the October forecast. The US economy will grow 2.9 percent and 2.7 percent respectively in 2018 and 2019, up 0.6 and 0.8 percentage points from the October report.

The said the first shots in a potential trade war have now been fired. Conflict could intensify if fiscal policies in the US drive its trade deficit higher without action in Europe and Asia to reduce surpluses. It also noted that the multilateral rules-based trade system is in danger of being torn apart.