NUSA DUA: Sustained trade tensions could slash Asia’s economic growth by up to 0.9 percentage point in coming years, the International Monetary Fund said, urging policymakers in the region to liberalise markets to offset the fall in export sales.

The IMF also warned in its twice-yearly report on the Asia Pacific region that the market rout seen in emerging economies could worsen if the US Federal Reserve and other major central banks tightened monetary policy more quickly than expected.

“Turmoil already seen in some emerging market economies could worsen, with negative spillovers to Asia through reduced capital flows and higher funding costs,” it said.

Changyong Rhee, director of the IMF’s Asia and Pacific Department, said there would be no winners in Asia from the global trade frictions, as other countries won’t be able to compensate fully for supply chain disruptions in China and the United States - the world’s top two economies.

Published in Dawn, October 13th, 2018