April 22, 2025 — Despite escalating trade tensions and mounting uncertainty, the International Monetary Fund (IMF) does not expect a global recession, according to IMF Managing Director Kristalina Georgieva. However, the organization's latest World Economic Outlook is expected to reflect notable downward revisions in global growth projections.
Speaking on the sidelines of the IMF's Spring Meetings, Georgieva warned that rising tariffs and reciprocal trade measures, particularly tied to former U.S. President Donald Trump’s protectionist policies, are creating “costly uncertainty” across the global economy.
“In a multi-polar world, where things are made may matter more than how much they cost,” Georgieva said. “The logic of national security says that a broad range of strategic goods — from computer chips to steel — must be made at home, and that this is worth paying for. Self-reliance is staging a comeback.”
According to the IMF, trust in the global trading system is eroding, contributing to what Georgieva described as tensions that are “boiling over.” These tensions not only impact investor confidence but also result in lower productivity and increased costs:
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Importers face profit pressure due to higher costs
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Consumers bear part of the tariff burden through rising prices
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Protectionist policies hinder long-term productivity growth
Georgieva emphasized that while global output is not in free fall, the outlook is increasingly fragile, especially if trade fragmentation continues. She also urged European Union nations to loosen fiscal policy constraints and strengthen internal integration to better support growth and resilience in the face of geopolitical shifts.
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