Trade Tensions Rock the Global Economy: IMF's Georgieva Speaks Out

IMF Managing Director Kristalina Georgieva warns of downward revisions in economic forecasts due to escalating trade tensions sparked by U.S. tariffs. While no global recession is expected, uncertainty and financial volatility pose risks, prompting Georgieva to call for economic cooperation and reforms to strengthen the global economy.

IMF Managing Director Kristalina Georgieva announced on Thursday that trade tensions and dramatic changes in the global trading system will lead to downward revisions in the IMF's economic forecasts. However, she emphasized that a global recession is not anticipated.

Georgieva highlighted that the recent U.S. tariffs and retaliatory measures from China and the European Union have created unprecedented uncertainty and market volatility. While no specific details were given about the forecast changes, higher inflation rates and financial market stress are expected.

With trade tensions escalating, Georgieva urged global cooperation in maintaining economic openness and progress. She warned that protectionism could harm innovation and productivity, stressing the importance of reforms and resilient monetary policies to avoid division in the global economy.

(With inputs from agencies.)