IMF says trade war hurting Asia and may cut global growth

Changyong Rhee is voicing a note of caution over trade friction between the US and China. (AFP)
Updated 18 December 2018

IMF says trade war hurting Asia and may cut global growth

  • Global body says said Japan and South Korea could be among countries in the region hit hardest by the trade war between US and China.
  • Citing the potential fallout from the Sino-US trade war, the IMF cut its global growth forecast in October to 3.7 percent for both 2018 and 2019

TOKYO: Trade frictions between China and the United States are already affecting business confidence and investment in Asia, a senior International Monetary Fund official said, warning that the fund could further cut its global growth forecasts in January.
Changyong Rhee, director of the IMF’s Asia and Pacific Department, said Japan and South Korea could be among countries in the region hit hardest by the trade war given their reliance on exports to China.
“Investment is much weaker than expected. My interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies,” Rhee told Reuters.
“We see global growth a little bit slower than we forecast in October,” he said on Monday.
Citing the potential fallout from the Sino-US trade war, the IMF cut its global growth forecast in October to 3.7 percent for both 2018 and 2019, down from 3.9 percent projected in July.
It expects Asia’s economic growth to slow to 5.4 percent next year from 5.6 percent projected this year.
Rhee said there was a chance the IMF could cut further its growth forecasts when it reviews them in January, given signs of slowdown not just in Asia but in Europe and the United States.
“Uncertainty is so large ... uncertainty means you have upside potential as well as downside risk. At this moment, we believe the downside risk is a little bit higher,” he said.
On China, Rhee said that it was not resorting to big-scale stimulus despite growing external headwinds, given the need to deal with long-term challenges such as curbing excess debt.
“They aren’t accelerating (stimulus) yet but taking the foot from the brake for the time being. But that doesn’t exclude the possibility that if the trade tension escalates, if growth goes down, they are ready to use stimulus,” he said.
“What we’re concerned and what we’re advising them is that the medium-term goals such as deleveraging are still important for financial stability,” Rhee added.
“So when they actually try to use stimulus, we hope they can use more fiscal policy rather than credit expansion.”


Iran: Oil product exports hit record high despite US sanctions

Updated 22 January 2021

Iran: Oil product exports hit record high despite US sanctions

  • ‘The enemy and Trump wanted us to perish and die, our exports to reach zero’
  • ‘We set the highest record of exports in the history of the oil industry during the embargo period’

DUBAI: Iran has achieved record high exports of petroleum products despite US sanctions, Oil Minister Bijan Zanganeh said in televised remarks on Friday.
Zanganeh said former US President Donald Trump and his secretary of state, Mike Pompeo, had “joined the dustbin of history, but we are alive and working with more hope to build the country.”
“The enemy and Trump wanted us to perish and die, our exports to reach zero,” he said.
“We set the highest record of exports in the history of the oil industry during the embargo period.”
Trump abandoned the Iran nuclear deal in 2018 and imposed sanctions on the Iranian energy and banking sector.
It is estimated that Iran exports less than 300,000 barrels of oil per day (bpd), compared with a peak of 2.8 million bpd in 2018.
US President Joe Biden has said that if Iran resumed strict compliance with the nuclear agreement — under which it restrained its nuclear program in return for relief from economic sanctions — the United States would too.
However, two of Biden’s top national security nominees said on Tuesday that the United States was a long way from making a decision to rejoin the deal.
Iran has significantly increased exports of petroleum products in recent years although oil products, like crude, fall under US sanctions.
Unlike crude oil, where the ultimate buyer is a refinery, other products can find their way to potentially thousands of small-scale industrial or residential buyers, making them difficult to trace.