Will help reduce some global uncertainty: IMF Director on US-China trade deal

The newly-signed US-China trade agreement will help relieve some uncertainty that has hindered worldwide economic growth, International Monetary Fund Executive Director Kristalina Georgieva said at a think tank event on Friday.

Earlier this week, President Donald Trump and Chinese Vice Premier Liu He signed a Phase One trade pact that many hope will help de-escalate the multi-year tariff war.

"We have some reduction of this uncertainty but it is not eliminated. A trade truce is not trade peace," Georgieva told guests at the Peterson Institute for International Economics in Washington.

The IMF annual World Economic Outlook to be released on Monday will project improvement in the years ahead from 2019, when IMF estimated trade tensions cost the world economy about $700 billion or 0.8 per cent reduction in collective gross domestic product, she added.

That estimate, she said, captures just one-third of the impact of ongoing trade wars with the remainder reflected in a difficult to measure impact on global business due to investor uncertainty.

Trump and Liu signed of the first of a two-part trade agreement on Tuesday pushing global stock markets into positive territory and providing an early indication of a rebound in investor confidence, analysts say.