Due to Increased Share of Exports to the US in Open Economies
Economic Growth Forecasts for Major Asian Countries Revised Downward
IMF Chief Urges Swift Trade Agreements
The International Monetary Fund (IMF) has assessed that the Asia-Pacific region, including Korea, is more vulnerable than other parts of the world to tariffs imposed by the Donald Trump administration in the United States.
Krishna Srinivasan, Director of the IMF's Asia and Pacific Department, stated at an Asia-Pacific regional economic outlook briefing held in Washington, D.C. on the 24th (local time), "The Asia-Pacific region is highly exposed to tariff shocks, and the impact is greater than in other regions."
Srinivasan explained that this is because the economies of Asian countries are highly open, place a strong emphasis on goods trade, and have seen an increase in the share of exports to the United States within global supply chains.
He added that, when comparing the country-specific reciprocal tariff rates announced by the United States on the 2nd by region, the effective tariff rate for the Asia-Pacific region will increase significantly.
For these reasons, he stated that the IMF lowered its economic growth forecasts for major Asian countries in its World Economic Outlook released on the 22nd.
In particular, regarding the downward revision of Korea's growth forecast for this year from 2.0% to 1.0%, he said, "This reflects heightened tensions in global trade and increased domestic policy uncertainty."
He continued, "Korea's first-quarter growth rate demonstrates that growth is slowing due to weakened domestic demand and a sharp decline in exports."
Kristalina Georgieva, Managing Director of the IMF, emphasized that trade conflicts between countries have a significant negative impact on the global economy and called for swift trade agreements.
Georgieva stated, "It is essential for major countries to reach agreements on trade policy, and we urge countries to do so quickly because the cost of uncertainty is extremely high."
She also argued that "some countries such as China need to take action to boost private consumption and must embrace the transition to a service-based economy."
Regarding Europe, she said, "It is time to complete the single market," urging the removal of barriers that hinder trade among European Union member states.
Meanwhile, Bridgewater Associates, the world's largest hedge fund that predicted the 2008 global financial crisis, warned on this day that the Trump administration's economic policies could trigger a recession. In a newsletter, Bridgewater's three co-Chief Investment Officers (CIOs), including Bob Prince, stated, "We expect an economic slowdown due to policy measures, and the likelihood of a recession is increasing."
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