The International Monetary Fund (IMF), has disclosed that it would revise the world economic growth projections downward next week when the World Economic Outlook is released, only stopping short of predicting a recession.
The Fund’s Managing Director, Kristalina Georgieva made this known in an address titled “Toward a Better Balanced and More Resilient World Economy” delivered during the 2025 Spring Meetings of the World Bank on Thursday, April 17, 2025.
She noted that the Fund would evaluate the cost of the ongoing global trade war in the outlook while raising an alarm that global market resilience is being tested again, fueled by the recent tariff hikes imposed by President Donald Trump of the United States.
“When countries put up obstacles in the form of tariff and nontariff barriers, the flow diverts. Some sectors in some countries may be flooded by cheap imports; others may see shortages. Trade goes on, but disruptions incur costs” she noted.
She added that the Fund will quantify these costs in its new World Economic Outlook, to be released early next week.
“In it, our new growth projections will include notable markdowns, but not recession. We will also see markups to the inflation forecasts for some countries”.
“Six months ago, in this very place, I spoke of low growth and high debt. But I also spoke of resilience—countries surviving large shocks thanks to strong fundamentals and agile policies.
“This resilience is being tested again—by the reboot of the global trading system. Financial market volatility is up. And trade policy uncertainty is literally off the charts” she began.
She however, advised that it is time to respond wisely.
“And it is a call to respond wisely. A better balanced, more resilient world economy is within reach. We must act to secure it”.
Delving into the issues, Georgieva warned that 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.
“Global economic integration has lifted vast numbers of people out of poverty and made the world as a whole better off.
“But not everyone benefitted. Communities were hollowed out by jobs going overseas. Wages were repressed by the growing availability of low-cost labor.
“Prices went up when global supply chains were interrupted. Many blame the international economic system for the perceived unfairness in their lives.
“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 lamented.
By: Babajide Okeowo
© Ripples Nigeria
