International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated that the global economy is projected to avoid a recession this year, despite the prevailing uncertainty surrounding tariffs. Her comments come just ahead of next week’s IMF and World Bank Spring meetings, where U.S. President Donald Trump’s tariff regime is expected to be a central topic, particularly in relation to the updated World Economic Outlook.
“In it, our new growth projections will include notable markdowns, but not recession,” Georgieva remarked at the fund’s headquarters in Washington. The IMF is also anticipated to revise its inflation forecast for several countries due to the impact of tariffs. In January, the IMF projected global growth of 3.3 percent this year and in 2026.
Tariff implications on economic projections
Trump has utilized his initial months in office to implement—and at times reverse—a series of tariffs on America’s trade partners. This has prompted private-sector economists to adjust their economic forecasts, predicting lower growth and higher inflation. Although Trump has reduced tariffs on most nations, he has escalated his trade conflict with China, imposing tariffs that reach as high as 145 percent, while Beijing retaliates with duties of 125 percent.
“We would like to see reduction in uncertainty, and it’s hard to get there if the two largest economies are still fighting,” Georgieva expressed. The uncertainty has caused tremors in global markets, with Wall Street experiencing a significant sell-off. Concurrently, the yield on the 10-year Treasury has surged, and the dollar has weakened.
Read more: IMF urges U.S. to collaborate on trade as tariffs pose economic risks
Warning signs in the financial markets
“Such movements should be taken as a warning,” she noted, advocating that increased clarity would enable businesses and consumers to plan effectively. The IMF chief also cautioned against a “drift to division,” asserting that fluctuating trade policies are testing economies’ resilience to significant shocks. “This is a reminder that we live in a world of sudden and sweeping shifts,” Georgieva stated.
Nevertheless, she emphasized that trade tensions have been escalating for an extended period, resulting in a depletion of trust among nations. “Trade distortions … have fed negative perceptions of a multilateral system seen to have failed to deliver a level playing field,” she remarked. Smaller advanced economies and emerging markets will be particularly vulnerable to tariffs, while low-income countries will face the compounded challenge of reduced aid.
Building a balanced global economy
The IMF chief urged nations to leverage the current shift in trade to create a more balanced and resilient global economy. For the United States, this entails reducing federal debt. At the same time, she encouraged China to enhance low private consumption and called on Europe to bolster competitiveness by deepening the single market.
“Reforms and rebalancing are for everyone,” Georgieva concluded, referring to the Gulf Cooperation Council (GCC), Africa, and Asia.
