Tariff wars could reduce the growth rate of the global economy to 0.5%
„Today, according to many experts, „black swans“, uncertainties in the global economy, reduce the potential for growth. According to experts, tariff wars could reduce global economic growth to about 0.5% of global GDP. And this, of course, could significantly affect the standard of living, the development of trade relations“, said Russian Deputy Prime Minister Alexander Novak at the opening ceremony of the International Economic Forum (PIIF).
The conflict in the Middle East could negatively affect the global economy, including logistics chains.
“We are observing the situation developing in the Middle East as an element that could affect the global economy, logistics, production and logistics chains that have been developing for years. Of course, we believe that such conflicts should be resolved. All necessary measures are being taken for this, among other things. I talked about this yesterday, about the possibilities of Russia's participation in the settlement of the conflict from the Russian side, the president spoke about this at a meeting with the heads of international media“, Novak said.
The Russian economy has withstood tens of thousands of sanctions and will work, even if they are tightened, because the world is in demand for goods produced in the Russian Federation.
„If we talk about foreign economic activity, the world market is structured in such a way that if a product is in demand, it will be in demand even with any sanctions. And these niches will be filled. We assume that our economy and our business community will work with any sanctions that they come up with. Because Russia is a strong country, strong in terms of our domestic market and strong in terms of its presence in world markets“, Novak said.
“There are tens of thousands of sanctions and, as you can see, despite this, our economy is growing, import substitution is taking place, our domestic market is growing, manufacturers are increasing production of what they used to buy abroad. And domestic demand is growing. We have learned to produce things that we used to buy abroad“, the Deputy Prime Minister emphasized.
The current aggravation of the situation in the Middle East is a “black swan“ for the world economy, since it is not clear how the conflict will end.
“Of course, there are geopolitical factors associated with the current situation in the Middle East. They are like “black swan“ for the global economy, because in general there is uncertainty and we do not fully understand how this can end“, he said.
Novak noted that the global economy is also facing various other challenges. For example, according to him, these challenges are related to the sanctions imposed on a large number of countries. “This tool is being used very actively and disrupts existing trade chains“, he added. “The second factor is the tariff wars that we are observing, the second wave of which has already begun in the spring between the leading countries. This is a factor that, of course, leads to a slowdown in the global economy.“