IMF Chief Warns of Global Trade War Fallout
The head of the International Monetary Fund (IMF) on Thursday warned of the consequences of the simmering global trade war.
"Trade policy uncertainty is literally off the charts," said Kristalina Georgieva, the organization's managing director, ahead of the IMF's spring meetings with the World Bank in Washington, CE Report quotes MIA.
The IMF is due to present its latest World Economic Outlook next week.
"Our new growth projections will include notable markdowns, but not recession," the economist said, in response to a series of announcements by US President Donald Trump imposing tariffs on imports.
The escalating trade conflict has shaken trust in the global economic system, she argued, putting all countries under pressure.
"Trade tensions are like a pot that was bubbling for a long time and is now boiling over to a large extent. What we see is the result of an erosion of trust, trust in the international system and trust between countries."
Georgieva pointed to unusual movements in key bond and currency markets, which are believed to have influenced Trump's decision to pause additional tariffs on many countries except China earlier this month.
In response to the uncertainty, "countries must redouble efforts to put their own houses in order," the director suggested.
The European Union requires further reforms to "improve competitiveness by deepening the single market," she asserted, pushing for a capital market union and lower restrictions on internal trade in services.
She also recommended that the United States tackle the increasing federal government debt, which would "strengthen resilience and reduce the current account deficit."
"We need a more resilient world economy," Georgieva stated.
