World economy on brink of ‘cold war two’, IMF official warns

Gita Gopinath says global economy’s fragmentation into power blocs risks wipeout of trillions of dollars in GDP

The world economy is on the brink of a second cold war that could “annihilate” progress made since the collapse of the Soviet Union, a senior International Monetary Fund official has warned.

Gita Gopinath, the IMF’s first deputy managing director, said the accelerating fragmentation of the world economy into regional power blocs – centred around the US and China – risked wiping out trillions of dollars in global output.