Mubasher: Trade disputes between the US and China are already taking a heavy toll on business confidence and investment in Asia, a top International Monetary Fund (IMF) official said, warning that global growth projections could be slashed further next January.

“Investment is much weaker than expected,” the IMF's Asia and Pacific Department director Changyong Rhee told Thomson Reuters, saying that his
“interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies.”

Japan and South Korea could be among the nations in Asia to take the hardest blow from trade war, due to their dependence on exports to China, Rhee said.

“We see global growth a little bit slower than we forecast in October,” he said.

The IMF slashed its global growth forecast last October to 3.7% for this year and next, from 3.9% projected in July, citing the potential aftermath of the trade war between Washington and Beijing, while expecting Asian economic growth to decelerate to 5.4% next year, from 5.6% expected this year.

Moreover, Rhee said that there is a possibility that the fund could lower further global growth projections when it reviews them next January, with signs of slowdown in Asia as well as Europe and the US.

“Uncertainty is so large [...] uncertainty means you have upside potential as well as downside risk,” Rhee said, adding that currently the IMF sees “the downside risk is a little bit higher.”