IMF Managing Director Kristalina Georgieva said Thursday that economies are testing through a restart of the global trade system, with U.S. tariffs and retaliation from China and the European Union unleashing uncertainty “out of the chart” in trade policies in recent months.
International Monetary Fund
IMF Managing Director Kristalina Georgieva said Thursday that trade tensions and a radical shift in the global trade system will trigger a downward revision of the IMF economic forecast, but no global recession is expected. Georgieva said the restart of the global trade system has tested the economies of the country – in recent months, U.S. tariffs and retaliation from China and the EU have sparked “chart” uncertainty in “trade policy” and extreme volatility in financial markets.
“Disturbation requires costs…Our new growth forecast will include outstanding price cuts, but not recessions,” she said in a speech at the IMF and the World Bank’s spring meeting next week. Trump’s tariffs and turbulence in financial markets are expected to dominate the spring meetings that will bring together central banks and finance ministers from around the world.
Georgeev said the increased uncertainty also increased the risk of financial market pressure, noting that the latest changes in the U.S. treasury production curve should serve as a warning. “If the financial situation worsens, everyone will suffer,” she said. Georgieva said the world’s real economy works well with a strong labor market and a solid financial system, but warned that increasing negative perceptions and concerns about recession could also affect economic activity.
“One thing I learned during crisis times is that perception is as important as reality,” she said. “If the perception is negative, it can be harmful to economic performance.”
U.S. President Donald Trump has raised the global trading system with a new tariff tsunami, which includes a 10% U.S. commodity tax from all countries, with higher rates in some, although these rates have been suspended for 90 days to allow negotiations. China, the EU and other countries have announced retaliation measures.
The IMF predicted a global growth of 3.3% in 2025 and 3.3% in 2026 in January. It will release an updated world economic outlook on Tuesday.
(This story has not been edited by DNA staff except for the title and published from Reuters)
