International Monetary Fund Managing Director Kristalina Georgieva said that US President Donald Trump’s push for sweeping tariffs is creating significant uncertainty and denting confidence, but is unlikely to lead to a recession in the near term.
In an interview at the Reuters Next Newsmaker Forum, Georgieva said, “We are not seeing a severe impact” so far from the tariffs Trump has imposed or threatened to impose since returning to the White House.
She noted that the IMF is likely to slightly lower its economic forecasts in its next update of the World Economic Outlook, due in about three weeks, but “we do not see a recession looming.”
Growth Estimates
In January, the IMF raised its global economic growth forecast for 2025 to 3.3% from 3.2% in its previous October estimate. Most of the increase is due to a half-percentage-point increase in the forecast for the United States to 2.7%.
However, Georgieva now expects the World Economic Outlook update, scheduled for April during the IMF’s Spring Meetings in Washington, to show a slight downward “correction” to those estimates.
Since returning to the White House in January, Trump has imposed 20% tariffs on all goods from China and is seeking to impose 25% tariffs on most goods from Canada and Mexico on Wednesday. He has also imposed significant tariffs on steel and aluminum imports, announced a 25% tariff on imported cars, and declared April 2 “Liberation Day,” when he intends to unveil global counter-tariffs.
Growing Risk
The unexpected pace of tariff announcements and implementation has clouded investor expectations, with major U.S. stock indexes falling by about 10% since mid-February on fears that the tariffs could slow growth or even trigger a recession.
Georgieva said that the longer uncertainty remains regarding Trump’s approach to tariff policy, the greater the risk to the outlook.
“The sooner clarity arrives, the better, because the longer uncertainty persists, as our research shows, the more likely it is to negatively impact growth,” she continued.
Reuters
