The International Monetary Fund (IMF) and the World Bank (WB) will begin annual meetings this Tuesday that will bring together in Washington Ministers of Economy and Finance, heads of central banks and economists in the midst of the rise in trade tensions between the United States and China and the disruption brought about by artificial intelligence (AI), while uncertainty persists about the ability to sustain inclusive global growth.
The managing director of the IMF, Kristalina Georgieva, warned last week that the world economy has performed “better than feared, but worse than necessary,” in a context where the effects of the tariffs promoted by US President Donald Trump have been more limited than expected, although volatility remains high.
“Uncertainty will be the new normal,” Georgieva stressed in an event prior to the meetings, which will last until Friday.
According to the head of the IMF, the new World Economic Prospects report, which is presented this Tuesday, will reflect only slightly slower global growth this year and next, after having “overcome multiple acute shocks” and with the constant fear of a higher and longer cost of doing trade over time.
However, he warned about the risks of concentration in financial markets, at maximum levels thanks to the revolution of the technological giants: “The US stock market is heading to levels not seen since the ‘dotcom’ boom 25 years ago,” he warned.
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The IMF has also warned in its most recent fiscal monitor about the persistent stagnation of growth and an increase in global public debt, pressured by higher defense spending, an aging population and high interest rates.
The organization recommends that governments prioritize investment in infrastructure, innovation and education, sectors that – according to the report – can increase long-term growth in emerging economies by up to 6%.
In this scenario, geopolitical tensions and the commercial struggle between the two largest economies on the planet set the backdrop for the IMF and WB meetings.
Trump has threatened an additional increase in tariffs to the one already imposed on China of 100% as of November 1 and controls on software exports, after China limited the output of rare earths, a key input for the advanced industry and defense of the United States.
Over the next week, economic authorities will seek formulas to sustain growth and maintain global financial stability with regions experiencing uneven growth, amid a delicate balance between restrictive fiscal policy, contained inflation and social pressures.
With information from EFE.
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