Fitch: Turkish economy to see positive impacts of US-China trade war

Published 26.07.2018 23:08

According to U.S.-based credit rating agency Fitch Ratings, the trade war between the U.S. and China may positively impact the Turkish economy in 2019 and 2020.

A statement released by Fitch indicates that the growing impact of the U.S.-China trade war may cause global economic growth to fall to 2.8 in 2019. The credit rating agency said, "The possible rise of the trade tension due to the imposition of new tariffs on the $2 trillion dollar global trade flow may result in a 0.4 percent contraction in the global expansion in 2019." In its June Global Economic Outlook report, Fitch estimated that the world economy might register a 3.2 percent expansion in 2019.

However, due to the trade wars, the agency cut back its estimations to 2.8 percent. The agency also expressed its expectation that the U.S.-China led trade war, which continues to grow, may not affect the Turkish economy this year, but the Turkish economy is likely to see a 0.1 percent and 0.2 percent rise in its growth in 2019 and 2020, respectively, as a positive impact of the tension. The statement also highlighted that if the U.S. imposes 25 percent tariffs on automotive imports from China, these tariffs will likely have reverberations on other economies. In this scenario, Fitch said, U.S. economic growth will lose momentum of 0.1 percent this year and 0.8 percent next year. Automotive import tariffs are estimated to reduce U.S. economic growth by 1 percent in 2020, the report said.

The Fitch report said the growing pace of the Chinese economy would slow down by 0.1 percent this year and 0.3 percent in 2019 and 2020.

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