Unlock the publisher's digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
The uncertainty about global trade policies is “outside the graphics,” warned the IMF chief, saying that Donald Trump's prices had to achieve global growth, to advance prices and potentially wreaks havoc with the financial markets.
Kristalina Georgieva said Thursday that the “global trade system” restarted by the United States, the largest shareholder in the fund, would lead to “notable markings” in growth estimates.
But while the IMF will increase its price pressure forecasts next week, it will not predict that the American president's policies will push the world economy in a pure and simple recession.
“The volatility of the financial markets is up,” said Georgieva in a speech. “And the uncertainty of commercial policy is literally outside the graphics.”
His comments were before IMF And the World Bank's spring meetings in Washington, where the concerns about Trump's threat to push American prices to their highest level in more than a century should dominate.
Finance ministers around the world should use next week's rally to try to meet their American counterparts and negotiate a reduction in price Announced by Trump on April 2.
Ajay Banga, head of World BankOn Wednesday, called on governments “to worry about negotiation and dialogue”.
“It will be really important in this phase,” he said, referring to the White House's decision to suspend the implementation of “reciprocal” prices for 90 days. “The faster we do, the better it will be.”
The fund's forecast revisions will appear in the last edition of its global economic perspectives. In January, the IMF predicted an expansion of 3.3% in 2025 and 2026, the world economy stimulated by the expectation of strong growth in the United States.
After Trump surprised the markets with a far More aggressive commercial policy That planned, many analysts have lowered their forecasts, some now seeing a significant risk of recession in the greatest economy in the world.
The Peterson Institute for International Economics said earlier this week that the US economy would increase by 0.1%, compared to 2.5% in 2024.
Georgieva said the Trump administration’s prices were an answer to a “trusted erosion”, partly triggered by more economical subsidies for exporters in some of the largest trade partners in the United States, including China and the EU.
Washington has also provided manufacturing subsidies thanks to measures such as the inflation reduction law of former President Joe Biden, who has given tax reductions for the production of green technologies in the United States.
Trump and Biden highlighted the massive support of Beijing State to its manufacturing industries as a problem for America. Trump threatened Brussels by 20% of prices, while China faces 145% samples.
Georgieva Also warned that continuous uncertainty about trade policies was likely to create more episodes of financial market stress, such as sales last week, when stock markets dropped sharply and the US government loan costs have increased.
The director general of the IMF has described the movements on the markets, which also saw the American currency drop, as “unusual”.
“Despite high uncertainty, the dollar has depreciated and the yield curves of the American treasure” smiled “-it is not the kind of smile that we want to see,” she said, adding that the movements “should be considered a warning”.
The drop in the dollar in the middle of the market panic led some to wonder if its status of global reserve currency is threatened.
“Something that is so well rooted, which benefits from these strong network effects, there are reasons to be skeptical about rapid disentangling (dollar status),” said Brent Neiman, former US Treasury manager under the Biden administration who is now a professor at the University of Chicago.
“But major changes on the extent to which the United States is considered a place of stable policies and a reliable commitment to the rules and the current order could certainly have an impact.”
