IMF Leader Highlights Increased Uncertainty in Global Economy Due to US Trade Policy
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Washington, Jan 11 (NationPress) Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has issued a warning regarding the global economy in 2025, asserting that it is confronted with increased uncertainty as a result of economic policies, especially concerning the direction of US trade policy.
"It is not unexpected, considering the scale and influence of the US economy, that there is intense global interest in the policy decisions made by the income administration, particularly regarding tariffs, taxes, deregulation, and government efficiency," Georgieva stated during a media briefing at the IMF's headquarters in Washington, D.C.
She emphasized that "this uncertainty is particularly pronounced regarding the future trajectory of trade policy, which adds to the challenges confronting the global economy, particularly for nations and regions deeply embedded in global supply chains," according to the IMF chief.
Georgieva observed that "the global landscape is reflecting this uncertainty through elevated long-term interest rates," despite the decline in short-term rates, referring to this phenomenon as "very unusual," as reported by Xinhua news agency.
Additionally, the IMF chief highlighted a transformation in market expectations, which results in ripple effects on asset prices and currency exchange rates. A robust dollar against both advanced and emerging market currencies could potentially "exacerbate funding costs for emerging market economies, especially those in low-income brackets," she warned.
She called upon policymakers to address the low-growth, high-debt dilemma. "Nations must continue striving for price stability, pursue gradual fiscal consolidation, but also urgently implement reforms that are pro-growth and sustainably enhance growth," she urged.
"While short-term rates are decreasing, long-term yields are rising. Countries cannot simply borrow their way out of this situation. They must achieve growth to resolve it," she added.
The IMF is scheduled to unveil its World Economic Outlook (WEO) Update on Friday, January 17.
