IMF says geopolitical risks can cause significant stock price corrections
Investing.com — The International Monetary Fund (IMF) warned on Monday that major geopolitical risks, including trade disputes, can lead to substantial corrections in stock prices.
The IMF’s assertion came in a chapter from its upcoming Global Financial Stability Report.
According to the IMF’s research, significant risk events such as wars, diplomatic tensions, or acts of terrorism can cause stock prices to decrease by an average of 1% monthly across all nations.
For emerging markets, the average decline is steeper, at 2.5%.
The IMF also noted that economic uncertainty amplifies market tail risks, which…
