The International Monetary Fund (IMF) has positively assessed the summit between U.S. President Donald Trump and Chinese President Xi Jinping, believing that a reduction in tensions between the two nations will benefit not only their economies but also the global economy.
On May 14, during a briefing, IMF spokesperson Julie Kozak stated that it is crucial for the world's two largest economies to engage at the highest levels. She expressed her approval of the constructive dialogue taking place between the two countries, noting that it is beneficial for both economies and the global economy to reduce trade tensions and uncertainty.
The IMF has long urged the U.S. and China to resolve trade conflicts through dialogue rather than unilateral actions. This statement aligns with the IMF's ongoing position that the burden of U.S.-China tensions on global trade and investment sentiment must be alleviated.
However, the summit was not without its challenges. President Xi warned during the meeting in Beijing that mishandling the Taiwan issue could lead U.S.-China relations to a "very dangerous place," underscoring that Taiwan remains a core point of conflict between the two nations.
Discussions on trade and investment reportedly progressed positively. President Trump announced in a Fox News interview that China has agreed to order 200 Boeing passenger jets. U.S. Treasury Secretary Scott Bancen also mentioned in an interview with CNBC that discussions included U.S. energy and agricultural exports, as well as the establishment of a bilateral trade and investment framework in non-strategic sectors.
The IMF also pointed out the deteriorating conditions of the global economy. Kozak noted that due to the ongoing conflict in the Middle East and the closure of the Strait of Hormuz by Iran, international oil prices have exceeded $100 per barrel, pushing the global economy toward a negative scenario outlined in the IMF's April World Economic Outlook.
This scenario predicts a 2.5% growth rate for global real GDP this year, which is 0.6 percentage points lower than the baseline forecast of 3.1% that assumes a quick resolution to conflicts. Last year's global growth rate was 3.4%.
The IMF's negative scenario is based on the assumption that oil prices will remain around $100 per barrel throughout the year, financing conditions will worsen, and inflation expectations will rise. However, Kozak explained that while short-term inflation expectations have increased due to rising energy prices, medium-term inflation expectations remain stable. She also assessed that global financial conditions are still accommodative.
The IMF is discussing support measures for member countries facing increased energy and raw material costs due to the Middle East conflict. Kozak did not specify any countries but mentioned that several nations have requested policy advice and assistance.
IMF Managing Director Kristalina Georgieva is scheduled to discuss global economic issues with finance ministers and central bank governors from the Group of Seven (G7) in Paris next week. Dan Katz, the IMF's Deputy Managing Director, will attend a meeting of finance deputies and central bank deputies from the Group of Twenty (G20) in Miami this week.
* This article has been translated by AI.
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