IMF Chief Warns Trade Policy Uncertainty Is ‘Off the Charts,’ Global Growth Forecast to Be Cut

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said global trade uncertainty is “literally off the charts,” citing rising protectionism and escalating tariff tensions driven by U.S. President Donald Trump’s trade agenda. 

Speaking in Washington on Thursday ahead of next week’s IMF and World Bank spring meetings, Georgieva said the Fund will revise its global growth forecasts downward, but does not expect a recession.

The IMF chief pointed to “surging trade tensions” and repeated disruptions to global commerce, warning they are slowing economic activity and undermining productivity.

“Trade goes on, but disruptions incur costs,” she said. “Our new growth projections will include notable markdowns, but not recession,” she added, noting some countries will also face faster inflation.

The IMF will release its updated World Economic Outlook on Tuesday. Its growth downgrade would follow a similar move by the World Trade Organization (WTO), which on Wednesday projected a contraction in global merchandise trade this year, citing U.S. policy as a major factor.

Georgieva said that “the U.S. effective tariff rate has jumped to levels last seen several lifetimes ago,” and warned that retaliatory measures by other countries were compounding risks. 

She pointed out that while the U.S., China, and EU are relatively less dependent on imports as a share of GDP, they are the world’s three largest importers. “Size matters—their actions impact the rest of the world,” she said.

Georgieva outlined three key consequences of rising trade barriers: heightened uncertainty, upfront growth hits, and longer-term productivity erosion. 

She highlighted evidence that tariffs raise costs for both producers and consumers, destabilize supply chains, and dampen investment. “In a world of shifting bilateral tariffs, planning becomes difficult,” she said. “Ships at sea don’t know which port to sail to.”

Finance ministers and central bankers will gather in Washington next week to assess the global outlook amid heightened tensions over Trump’s push to overhaul the global trade system and isolate China.

The U.S. equity market continued to struggle on Thursday afternoon. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, traded flat, and the SPDR S&P 500 ETF Trust (SPY) edged 0.42% higher. Meanwhile, the SPDR Dow Jones Industrial Average ETF (DIA) declined 1.1%. 

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Read also: Trump Berates Powell’s Leadership, Says Fed Chief Always ‘Too Late and Wrong’ On Rates

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