IMF Foresees Downward Revisions in World Economic Growth
Georgieva said the flow of trade will change direction as countries set barriers with tariffs and non-tariff barriers, and that trade will continue but disruptions will cause costs.
"We will quantify these costs in our new World Economic Outlook, to be released early next week. In it, our new growth projections will include notable markdowns, but not recession," she said in a speech in Washington.
"We will also see markups to the inflation forecasts for some countries," Georgieva added.
The IMF in January forecast global growth of 3.3% in 2025 and 3.3% in 2026.
Commenting on the global economic outlook, Georgieva said the resilience of the world economy was tested again with the restructuring of the global trade system, sparked by US tariffs and retaliation by China and the EU.
Noting that global stock prices fell as trade tensions escalated, Georgieva said this was a reminder that we live in a world of sudden and sweeping change.
Describing the trade tensions as “a pot that was bubbling for a long time and is now boiling over," the IMF chief said what we are seeing is largely the result of an "erosion of trust."
"Trade distortions—tariff and nontariff barriers—have fed negative perceptions of a multilateral system seen to have failed to deliver a level playing field," she said.
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