IMF projects global economic growth amid trade tensions and rules out recession

The International Monetary Fund (IMF) has ruled out a global recession despite the ‘significant’ impact of ongoing international trade tariff tensions on developing economies.

Speaking at a curtain raiser for the 2025 Spring Meetings, Managing Director Ms. Kristalina Georgieva acknowledged slowed economic growth in many countries. 

“Financial markets’ volatility is up, and trade policy uncertainty is literally off the charts…Our new growth projections will include notable markdowns, but not recession,” she said.

Ms. Georgieva emphasized the need for resilience, stating, “We need a more resilient world economy, not a drift to division. And to facilitate the transition, policies must allow private economic agents time to adjust and deliver.”

She called on countries to “redouble efforts to put their own houses in order” by adopting fiscal measures to rebuild fiscal space, improve growth potential, and uphold central bank independence. 

Ms. Georgieva highlighted three major consequences of trade tensions: costly uncertainty, short-term negative impacts on economic growth, and long-term productivity erosion, especially in smaller economies due to protectionism.

She urged a restart of global trends toward lower tariffs, reduced non-tariff barriers, and cooperation in a multipolar world to ensure that “there can be cooperation in a multipolar world.” 

The IMF Chief stressed the importance of reforms and rebalancing efforts globally. 

“Policymakers are taking action to strengthen their economies, improve regional ties, and reduce surpluses and deficits. We strongly support these efforts,” she said.

Ms. Georgieva encouraged states to minimise obstacles to private enterprise and innovation. 

“In many cases, the state can and must do more to reduce obstacles to private enterprise and innovation. In other words, eliminate self-inflicted injuries.

“With cool heads, clear vision, and strong will, times of change can be times of renewal. The secret to seizing the moment is to focus all energy not on preserving the old, but on building the new. A better, balanced, more resilient world economy,” she stated.

Ms. Georgieva said that the World Economic Outlook to be presented at the Spring Meetings would outline policy actions to address challenges and achieve better outcomes. 

She reiterated the IMF’s commitment to assisting countries with macroeconomic adjustments and reforms. 

“The IMF will help countries manage macroeconomic adjustment and advance reforms,” she said.

Source: GNA

The post IMF projects global economic growth amid trade tensions and rules out recession appeared first on Ghana Business News.

Read Full Story