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The global economy is facing a new ice age as US- and China-aligned blocs coexist in an environment of slow growth and tension, according to a presentation by IMF first deputy managing director Gita Gopinath. The IMF sees global economic growth slowing significantly over the next three to five years, with mounting geopolitical and geoeconomic tensions contributing to the slowdown. Trade restrictions and financial sanctions have increased sharply, leading to concerns about fragmentation. The emergence of "connector" countries is helping to offset the erosion of direct links between the US and China, but the IMF questions whether this can continue. This economic fragmentation is much more costly than during the initial years of the Cold War, as goods trade now makes up a larger percentage of the global economy. Gopinath stressed the importance of preserving the gains from economic integration and urged national leaders to listen.
