IMF’s Second-in-Command, Gita Gopinath, issued a warning about potential global economic troubles. She expressed concerns that if the world’s economies split into two groups—mainly the U.S. and Europe in the West and China and Russia in the East—due to trade shifts and geopolitical tensions, it could resemble a new Cold War.

This could lead to a significant 2.5% to 7% drop in the global economy. Factors like the pandemic and Russia’s invasion of Ukraine have already prompted countries to focus more on local production. Gopinath urged for careful management of this shift, as it could outweigh the benefits and harm global efforts on issues like climate change.

She suggested practical approaches, such as agreements ensuring the international flow of essential resources like minerals and food, to maintain global goals.

The source of this information is Reuters.

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