With the International Monetary Fund (IMF) forecast that some countries are growing slowly and inflation is high, the head of the organization has a clear warning to all countries: keep your “houses organized”.
Managing Director Kristalina Georgieva issued a warning as the International Monetary Fund (IMF) will release its world economic outlook next Tuesday, saying there will be no recession despite the growth of “famous sales.”
However, this does not mean that the country will not face difficulties.
“All countries must redouble their efforts to keep their homes organized,” she said in a speech in the U.S. on Thursday. “In a world of high uncertainty and frequent shocks, there is no room for delays to reform to enhance economic and financial stability and increase growth potential.”
The comments came three months after the second term of U.S. President Donald Trump.
George Wah's speech pointed out the problems that have emerged in recent months.
Get the daily national news
Get news, politics, economics and current events titles delivered to your inbox every day.
That is, she said “uncertainty is expensive,” and the cost of a project could be affected by tariffs in dozens of countries and lead to delays in investment decisions, volatility in financial markets, and even questions about which ports should sail.
She went on to say that protectionism “in the long run, especially in smaller economies, erodes productivity.”
“Ultimately, trade is like water: when countries impose barriers in the form of tariffs and non-Talif barriers, the flow shifts,” she said. “Some sectors in some countries may be flooded with cheap imports; others may see shortages. Trade continues, but creates cost of damage.”
In the face of uncertainty, Georgieva urged countries to adjust their fiscal policies to lower debt levels when necessary, while also making their monetary policies “agile and credible”.
Some central banks appear to have taken the treatment in the past few weeks since Trump's latest round of tariffs came into effect.
The Canadian bank did not lower its benchmark interest rate on Wednesday, keeping it at 2.75%, and the bank said in a statement that major shifts in U.S. trade policy and unpredictability tips increased uncertainty, lower outlook for economic growth and increased inflation expectations.
Fed Chairman Jerome Powell also said in his speech Wednesday that interest rates may need to be cut before stopping due to concerns over inflation and the impact of tariffs.
The Bank of England also warned last week that Trump's import tariffs increased the risk of a blow to the global economy.
Georgieva said the second “very important priority” is that the state should focus on internal and external macroeconomic imbalances, although she acknowledged that it could be difficult.
The IMF directors continue to recommend that the three “big actors” (China, the EU and the United States) take their own actions.
In China, the IMF recommends that the country delegate back “universal state participation” in its industrial policies and industries, while promoting “long-term low” private consumption.
Although the IMF points out that the U.S. economy has strong productivity growth, it must work to put its federal government debt on a “path of decline”, and Georgieva said that this will require a substantial reduction in the deficit.
She also said the EU should focus on Germany's “confident fiscal expansion” to promote defense and infrastructure spending, and the entire group must improve competitiveness by “deepening the single market”.
Georgieva said that resilience is being tested through the “restart” of the global trade system and that work must be done in trade policies.
“The goal must be to ensure that the maximum player is ensured to be open and provide a higher level of playing environment, to restart the global trends to lower tariff rates, while also reducing non-Talif obstacles and distortions,” she said.
“We need a more resilient world economy, not a divided situation.”
– Related to Uday Rana of Global News and the Associated Press documents
& Copy 2025 Global News, a division of Corus Entertainment Inc.
