LISBON, (Reuters) - A trade war between the United States and China poses the largest risk to global stability, IMF First Deputy Managing Director David Lipton said on Monday, adding that fiscal stabilisation is needed to respond to macroeconomic shocks in Europe.
"Obviously, this is not a matter for Europe alone. The United States needs to get its fiscal house in order as well. U.S.-China trade tensions pose the largest risk to global stability," Lipton said during a conference in Lisbon.
The ongoing trade war, which started around eight months ago, has affected the flow of billions of dollars of goods between the two countries.
(Reporting by Catarina Demony; Editing by Axel Bugge and Paul Day)(catarina.demony@thomsonreuters.com; 00351213509216)