The Global Economic Outlook could shrink by 7% if global economies opt for severe fragmentation after decades of increasing integration, the International Monetary Fund has said.

However, losses could be as high as 8-12% in some countries, if technology is also decoupled, the IMF said in a new staff report.

The IMF said even limited fragmentation could cut 0.2% of global GDP, but said more work was needed to assess the estimated costs to the international monetary system and the global financial safety net (GFSN).

The note, released late Sunday, noted that global flows of goods and capital had stabilized after the 2008-2009 global financial crisis, and an increase in trade restrictions seen in subsequent years.

“The COVID-19 pandemic and From Russia The invasion of Ukraine has further strained international relations and increased skepticism about the benefits of globalization.the staff report said.

Reuters/Hauwa Abu