The International Monetary Fund (IMF) reports growth in trade volumes within individual geopolitical blocs, not between them, states the published IMF report on the prospects for the development of the world economy.
„Despite ongoing geopolitical tensions, the volume of world trade relative to world GDP has not decreased. However, signs of geo-economic fragmentation have begun to emerge, with more trade taking place within geopolitical blocs rather than between them. In particular, if we compare the averages for the periods from 2017 to 2022 and from 2022 to the first quarter of 2024, we can see that the growth of trade in goods between geopolitically distant blocs has decreased by about 2 .5 percentage points more than within blocks. If geopolitical tensions continue to develop, as during the Cold War, a more fragmented global trade landscape could emerge, noted the authors of the paper, which was published as part of the fall meeting of the fund's governing bodies and the Global Fund. Bank.
According to the IMF, if fragmentation is “accompanied by increased trade within the bloc, this does not necessarily mean rapid deglobalization; could reduce the resilience of global supply chains, increase financing costs, disrupt cross-border capital flows and reduce market efficiency, slowing knowledge sharing between advanced, developing and emerging economies will increase costs and risks for business and created greater economic costs for the green transition.
The report highlights “the need for multilateral cooperation to limit the costs and risks of geo-economic fragmentation and climate change, and support debt restructuring.“
Experts pay attention to “geopolitical risks related to the possibility of escalation of regional conflicts and how this may affect commodity markets”. “Gold prices rose 21.9% to record highs against the US dollar, supported by geopolitical uncertainty, expectations of a rate cut and inflation in the US,”, the report said. At the same time, according to the fund's estimates, "further intensification of geopolitical differences could negatively affect trade and investment".