The managing director of the IMF, Kristalina Georgieva, assured this Wednesday that the world economy has performed “better than feared, but worse than necessary,” in part because the impact of the tariffs was less than expected, although global economic uncertainty is “the new normal.”
“For the moment, the world has avoided a trade war,” said Georgieva at an event in Washington that begins the meetings of the IMF and the World Bank (WB), whose main agenda will take place next week.
At the traditional opening event, the IMF managing director announced that the world economic outlook report, which will be presented next week, will show global growth “that is only slightly slower” for this year and next, because the world has managed to “overcome multiple acute shocks.”
In his opinion, the tariffs implemented by US President Donald Trump after he came to power in January have had a smaller impact than expected and “for the moment” the world has not been involved in a trade war.
However, he warned that “uncertainty continues to grow and is here to stay and will be the new normal,” both for developed and developing countries that demand better opportunities on the streets.
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World economy progressing ‘better than feared’, but uncertainty remains: IMF
Georgieva urged the European Union (EU) to move forward in consolidating its single market and financial union: “for the love of God, move forward with a union of the financial system,” she asserted, while recommending a European “single market tsar.”
In this sense, the managing director of the IMF gave as an example the difference between American “mega-companies”, among which the technological giants stand out, and European business leaders, “who are dwarfed” in comparison, while recommending Germany to increase fiscal spending and investment in infrastructure.
As for China, Georgieva recommended cleaning up the real estate market and recalled that the real depreciation of its currency is something that goes against its attempt to balance its growth.
In general, the head of the IMF called for working to improve growth, repair public finances and address internal economic imbalances.
Georgieva pointed out that in the United States the stock market “is on its way to levels that we have not seen since the internet bull market (of the so-called ‘dotcom’) 25 years ago”, driven by technology companies and the Artificial Intelligence boom, which some analysts fear is at bubble levels.
“If a corrective shock were to occur, more restrictive financial conditions” would endanger the world economy, he warned.
With information from EFE.
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