U.S. President Donald Trump, by implementing new tariffs, is creating significant uncertainty that could impact economic confidence. However, according to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), this is unlikely to lead to a recession in the near term.
This is reported by Finway
In her latest interview, Georgieva noted that the IMF is likely to lower its economic forecast in the upcoming updated review, which is set to be published in three weeks. Nevertheless, she emphasized: «We do not see a recession on the horizon.»
“What we are seeing in high-frequency indicators really points to a slight weakening of consumer and investor confidence, and we know that this then translates into an impact on growth prospects,” she stated.
Georgieva also reported that the IMF is not observing any «dramatic impact» from the new tariffs imposed by Trump since his return to the presidency. In January, the fund raised its global economic growth forecast for 2025 to 3.3% from 3.2%, but now expects that an update to the macroeconomic forecast will be published in April during the spring meetings in Washington.
Kristalina Georgieva pointed out that many countries have exhausted their fiscal and monetary space during the COVID-19 pandemic, which has increased their debt levels and limited their ability to respond to new economic challenges. She warned that any slowdown or reversal in declining inflation could complicate interest rate reductions and debt refinancing.
The market situation is also reinforced by unpredictable rates of announcement and implementation of new tariffs, which have negatively affected investor sentiment. Major U.S. stock indices have fallen nearly 10% since mid-February due to concerns that tariffs could slow economic growth or even trigger a recession.
“The sooner there is more clarity, the better, because uncertainty, as our research shows, the longer it lasts, the more it can negatively impact growth,” she added.
Georgieva also noted that global trade continues to grow despite a surge in protectionist measures worldwide, which are altering trade patterns and threatening globalization. She emphasized that trade in services is growing faster than trade in goods.
Since returning to the White House in January, Trump has already imposed a 20% tariff on all goods from China, threatened a 25% tariff on most goods from Canada and Mexico, and introduced high tariffs on steel and aluminum imports. He also announced a 25% tariff on imported cars and announced a «Day of Liberation» on April 2, when he plans to unveil new global customs tariffs.