The impact of the trade war between China and the United States of America on the global economy is somewhat overestimated, senior analyst at Alpari Company Vadim Iosub said during an online conference on the BelTA website.
The analyst noted that it is becoming more and more common to blame the trade war for deceleration of economic growth in third countries and for any drop in commodity prices. “However, this did not prevent some commodities, like palladium, from reaching their all-time highs. Oil prices are rising, too. Last year, despite the trade war that erupted in the summer, the trade between the USA and China grew,” the expert said.
According to Vadim Iosub, the real impact of the trade is the deceleration of GDP growth in the USA and China by an estimated 0.2 percentage points and that of the global GDP by 0.1 percentage point. “These processes have little impact on Belarus, Russia, and the European Union. Brexit will be a bigger threat to the EU economy, however, even Brexit will not be a catastrophe,” he believes.
Vadim Iosub shared projections for global oil prices for 2020. The expert noted that the price for Brent Blend was within $55-75 for the most part of the year. “In early October it grew from the lower threshold of this range up to $65 on the back of expectations that OPEC+ countries would agree to deepen oil production cuts. Oil producers agreed to cut output by an extra 503,000 barrels a day in the first quarter of 2020 at the meeting on 6 December. It is still unclear what action will follow when the first quarter is over,” the analyst said.
The oil deal seeks to compensate for higher output and export from the United States, although American output is expected to increase more slowly in 2020. “If nothing extraordinary happens, the crude price will tend to hover at $60-65 per barrel,” the expert believes.