IMF Managing Director Kristalina Georgieva has emphasized the urgent need for the US to secure trade deals to mitigate the detrimental impact of President Donald Trump’s tariff policies on the global economy. During a press conference at the IMF’s spring meetings in Washington, Georgieva highlighted the unprecedented uncertainty caused by what she termed “major trade policy shifts,” stressing the importance of a swift resolution among key players to reduce uncertainty costs. The financial markets experienced a boost earlier in the week following indications of a potential softening in Trump’s trade stance, particularly regarding negotiations with China.
Despite the positive market response, no concrete agreements have been finalized, with other countries like the UK also engaging in trade discussions with the US. The IMF recently revised down its global economic growth forecasts, warning of further risks if the trade war escalates. Georgieva acknowledged the challenging economic landscape, noting the limited policy flexibility for many countries after enduring successive shocks in recent years.
Furthermore, amidst criticisms of multilateral institutions by the Trump administration, Georgieva welcomed US Treasury Secretary Scott Bessent’s acknowledgment of the enduring value of institutions like the IMF and the World Bank. However, Bessent criticized these institutions for what he termed as “mission creep” and broad, unfocused agendas encompassing issues like gender and climate change. Responding to these criticisms, Georgieva emphasized the need for focus in addressing the complex array of global challenges while reaffirming the IMF’s commitment to fiscal discipline. The IMF’s current global growth forecast stands at 2.8% for this year, reflecting the challenging economic environment characterized by heightened uncertainty and risks.
