Trade and Investment

Asia and the world face growing risks from economic fragmentation, says IMF

Interdependencies between economies mean that economic fragmentation would be very costly, especially for Asia Image: Unsplash/Jezael Melgoza

Diego Cerdeiro

Economist, IMF

Siddharth Kothari

Economist, IMF’s Asia and Pacific Department

Chris Redl

Economist, IMF


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Graph showing the trade uncertainty contribution to World Uncertainty Index, as a percentage
Signs of trade fragmentation are increasing, with trade-related uncertainty surging in recent years. Image: Ahir, Bloom and Furceri 2022
Figure showing the peak of cumulative effects
Increased trade policy uncertainty reduces investment and economic output and raises unemployment for years Image: Ahir, Bloom and Furceri
Figure showing the estimated aggregate GDP losses from trade fragmentation
Permanent economic output losses due to lower productivity from global trade fragmentation can be significant. Image: IMF

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