USA: According to a report released on Monday by the International Monetary Fund (IMF), the cost of trade fragmentation could be anywhere between 0.2% and almost 7% of global gross domestic product (GDP).

It was noted that the 7% GDP is roughly equivalent to the annual economic output of Germany and Japan.

In the report titled "Confronting Fragmentation Where It Matters Most: Trade, Debt, and Climate Action," it was stated that "If technological decoupling is added to the mix, some countries could see losses of up to 12 percent of GDP."

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The report continued, "Fragmentation could make it even harder to assist numerous vulnerable emerging and developing economies that have been severely hit by multiple shocks.

According to the report, there are many obstacles facing policymakers, including geopolitical tensions, a slowdown in the global economy, climate change, the crisis of rising living costs, and high debt levels.

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The IMF warned that "a new Cold War" could break out, dividing the world into competing economic blocs, which would make everyone poorer and less secure.

A global uptick in new trade restrictions has been accompanied by rising trade tensions between the two largest economies on earth. Along with causing human suffering, Russia's invasion of Ukraine has severely disrupted global food, energy, and financial flows, the report stated.

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The organisation emphasised that among the key measures to combat fragmentation are bolstering the system of international trade, assisting vulnerable nations in dealing with debt crises, and enhancing climate action.