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Jakarta Post

Analysis: Trade war and the bumpy road to supporting growth

  • Andry Asmoro

    Mandiri

Jakarta   /   Wed, May 22 2019   /  02:54 am

The global economy became suddenly more volatile in emerging markets this month as growing concerns over the escalation of the trade war between the United States and China dampened the positive market sentiment that had been in place since December, last year.The source of the volatility is clear: the escalation of the trade war between the US and China. We believe that this will be the biggest risk to the global economy in the next three to six months if there are no positive moves from both sides to ease the tension.The rising US-China trade tension has further added to the negative sentiment that has since last year affected global economic growth. The growing conflict has triggered foreign capital outflows from emerging markets.The Institute of International Finance (IIF) reported that capital outflows from the Chinese equity market reached a total of US$2.5 billion or about $600 mi...