|
The global economy has shown stronger-than-expected resilience despite major shocks such as United States President Donald Trump's tariff measures, but that strength may not last, International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned, according to Al Jazeera.
"Buckle up," Georgieva said in a speech at the Milken Institute think tank on Wednesday. "Uncertainty is the new normal, and it is here to stay." Her comments came on a day when gold prices hit a record high of $4,000 an ounce, as investors sought safe havens amid a weakening dollar and heightened geopolitical uncertainty. Georgieva spoke ahead of the IMF and World Bank annual meetings scheduled for next week in Washington, DC, where Trump's trade policies are expected to dominate discussions among global finance leaders and central bankers, Al Jazeera reported. According to IMF forecasts, the global economy is projected to grow by 3 per cent this year. Georgieva credited several factors for this continued growth, including strong government policies, private sector adaptability, and the less severe impact of tariffs than initially anticipated. "But before anyone heaves a big sigh of relief, please hear this: Global resilience has not yet been fully tested. And there are worrying signs the test may come. Just look at the surging global demand for gold," she said. On Trump's tariff policy, Georgieva cautioned that "the full effect is still to unfold." She added, "In the US, margin compression could give way to more price pass-through, raising inflation with implications for monetary policy and growth." The Republican administration has imposed tariffs on nearly all major US trading partners since April, targeting countries such as Canada, Mexico, Brazil, China, and even the small African nation of Lesotho. "We're the king of being screwed by tariffs," Trump said on Tuesday in the Oval Office during his meeting with Canadian Prime Minister Mark Carney, Al Jazeera reported. Although Washington has announced trade frameworks with countries like the United Kingdom and Vietnam, the tariffs have fuelled global economic uncertainty. "Elsewhere, a flood of goods previously destined for the US market could trigger a second round of tariff hikes," Georgieva warned. The US Supreme Court is set to hear arguments next month on whether Trump has the authority to impose certain tariffs under the International Emergency Economic Powers Act. In her wide-ranging remarks, Georgieva also highlighted rising youth discontent across the globe, warning that many young people now face bleaker economic prospects than previous generations. "The young are taking their disappointment to the streets from Lima to Rabat, from Paris to Nairobi, from Kathmandu to Jakarta. All are demanding better opportunities," she said. "And here in the US, the chances of growing up to earn more than your parents keeps falling, and here too, discontent has been evident - and it has helped precipitate the policy revolution that is now unfolding, reshaping trade, immigration and many international frameworks." Georgieva further called for stronger intra-regional trade in Asia, business-friendly reforms in Africa, and greater competitiveness in Europe, Al Jazeera reported. For the United States, she urged the government to tackle the rising federal debt and promote household savings. The US national debt has surged from $380 billion in 1925 to $37.64 trillion in 2025, according to data from the US Department of the Treasury. The Congressional Budget Office estimated in July that Trump's new tax and spending legislation would add another $3.4 trillion to the total by 2034. The IMF, which has 191 member countries, works to promote global economic growth, ensure financial stability, and reduce poverty, according to Al Jazeera. (ANI)
|
