Economy|International Monetary Fund‘Buckle up’: IMF chief warns of economic uncertaintyIMF’s Kristalina Georgieva says ‘uncertainty is the new normal’ as tariffs weigh on the global economy.
The International Monetary Fund (IMF) has reported that the global economy is performing better than anticipated despite significant disruptions such as tariffs imposed by the United States. However, the IMF warns that this resilience might not endure.…
The International Monetary Fund (IMF) has reported that the global economy is performing better than anticipated despite significant disruptions such as tariffs imposed by the United States. However, the IMF warns that this resilience might not endure. Managing Director Kristalina Georgieva emphasized that uncertainty is expected to persist.
Gold prices have reached $4,000 per ounce for the first time, driven by investor demand for safe havens amid a depreciating dollar and geopolitical tensions. Georgieva's comments precede the annual meetings of the IMF and World Bank scheduled for next week in Washington, DC, where trade penalties are likely to be a key topic.
The global economy is projected to grow by 3 percent this year. Georgieva attributes this to decisive economic policies implemented by various countries, adaptability within the private sector, and the less severe impact of tariffs than initially feared. She cautioned that global resilience remains untested, as indicated by the rising demand for gold.
Regarding US tariffs, Georgieva noted that their full impact is yet to unfold. She highlighted the potential for margin compression in the US to lead to increased price pass-through, thereby affecting inflation and monetary policy. The US administration has imposed import taxes on nearly all its trading partners, including Canada, Mexico, Brazil, China, and Lesotho.
Managing Director Kristalina Georgieva emphasized that uncertainty is expected to persist.
The US has established some trade frameworks with countries such as the United Kingdom and Vietnam, but tariffs have introduced global uncertainty. Georgieva warned that an influx of goods initially intended for the US market might provoke a subsequent round of tariff increases. The US Supreme Court is scheduled to review the authority of the President to impose certain tariffs under the International Emergency Economic Powers Act next month.
In her comprehensive address, Georgieva highlighted worldwide youth discontent, as many young individuals anticipate earning less than their parents. This discontent has been evident from Lima to Rabat, Paris to Nairobi, and Kathmandu to Jakarta, where youth demand better opportunities.
Georgieva called for enhanced internal trade within Asia, business-friendly reforms in Africa, and increased competitiveness in Europe. For the US, she urged the government to tackle federal debt and promote household savings. The national debt has surged from $380 billion in 1925 to $37.64 trillion in 2025, according to the US Department of the Treasury. The Congressional Budget Office indicated in July that recent tax and spending legislation will add $3.4 trillion to the national debt by 2034.
The IMF, consisting of 191 member countries, aims to foster global growth, ensure financial stability, and alleviate poverty.
Based on reporting by Al Jazeera.