DAVOS, Switzerland — The International Monetary Fund (IMF) is hoping that China and the United States will reach a broader trade agreement in the coming months, despite the recent signing of their "phase one" deal.
The two largest economies in the world agreed to roll back some of their existing trade tariffs last week in what was dubbed as a "phase one" deal. The agreement also envisaged higher Chinese purchases of U.S. agricultural goods and it was seen as a temporary truce in a two-year-long dispute between Washington, D.C., and Beijing. However, the IMF is expecting more from both nations.
"While we have had positive news with the U.S.-China 'phase one' trade deal, there's obviously a lot more that still needs to be done," Gita Gopinath, the IMF's chief economist, told CNBC Monday.
"We would hope there would be a more comprehensive deal between the U.S. and China as the months go by," Gopinath also told CNBC at the World Economic Forum in Davos, Switzerland.
In its latest economic update, released Monday, the IMF trimmed its global growth forecasts. The Fund now expects a global growth rate of 3.3% for 2020. In the report, the IMF also warned that trade tensions and disruptions could return.
The signing of the deal is expected to boost the Chinese economy slightly. The IMF upped its growth forecast for China by 0.2 percentage points for 2020 to 6%.
"However, unresolved disputes on broader U.S.-China economic relations, as well as needed domestic financial regulatory strengthening, are expected to continue weighing on activity," the IMF said Monday.
Speaking to CNBC at Davos, Gopinath added that "trade tensions and disruptions is something that we put out there as an important risk."
