The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, has called for a fundamental reset of global trade relations, warning that escalating trade tensions, rising protectionism, and a breakdown in international trust are threatening the world economy.
Addressing journalists in Washington ahead of the IMF and World Bank Spring Meetings, Georgieva described the current level of uncertainty in global trade policy as “off the charts”.
“This serves as a reminder that we inhabit a world characterised by abrupt and extensive changes.”
The IMF now anticipates “considerable” reductions in its forecasts for global economic growth, though Georgieva said a global recession was not expected.
She attributed much of the current turmoil to a “reboot of the global trading system”, triggered by a wave of new US tariffs and retaliatory measures from China and the European Union.
“Financial market volatility is up. And trade policy uncertainty is literally off the charts.
“Disruptions entail costs.
“Our new growth projections will include notable markdowns but not recession,” she said.
The IMF chief highlighted the erosion of trust in the international system and between countries as a central factor undermining economic stability.
“A better balanced, more resilient world economy is within reach, but achieving it will require collective action and trust.”
Georgieva warned that protectionism harmed innovation and long-term productivity, particularly in smaller economies, and that shielding industries from competition undercut entrepreneurship and hurt innovation.
She urged the world’s largest economies to cooperate and secure a trade agreement that preserved openness and restarted the global trend toward lower tariffs and reduced non-tariff barriers. “We need a more resilient world economy, not a drift to division.
“All countries, large and small alike, can and should play their part to strengthen the global economy in an era of more frequent and severe shocks.”
The IMF is set to release its updated World Economic Outlook next week, with the organisation expected to pare back its previous global growth forecasts in light of the ongoing trade turmoil.
The call for renewed international cooperation will be a central theme at the upcoming IMF and World Bank Spring Meetings in Washington later this week, where global leaders will seek solutions to mounting economic challenges.
