The International Monetary Fund (IMF) sees a “notable” downward revisions in the new global economic growth forecasts in its World Economic Outlook report to be published next week.
However, no recession is seen for the global economy. In January, the IMF said it forecast a global growth of 3.3 percent in 2025 and 3.3 percent in 2026.
Kristalina 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.
She said that at present, world economy is being tested with the restructuring of the global trade system, caused by US recriprocal tariffs and retaliation on the issue by China and the European Union.
Describing the trade tensions as “a pot that was bubbling for a long time and is now boiling over,” Georgieva said what is happening globally 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.
Also, observing the fall of global stock prices as trade tensions escalated, Georgieva said this should serve as reminder that the people now live in a world of sudden and sweeping change.
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