IMF Warns Trade War Threatens Global Growth And Fuels Inflation.
The International Monetary Fund (IMF) has issued a stark warning that rising global protectionism, spearheaded by President Donald Trump’s trade policies, is likely to weaken global economic growth and push inflation higher in the months ahead.
Speaking ahead of the IMF and World Bank spring meetings in Washington, IMF Managing Director Kristalina Georgieva revealed that the Fund’s latest projections, due for release next week, will show a marked slowdown in global output, though not yet a recession.
“Our new growth projections will include notable markdowns, but not recession,” Georgieva said in her speech on Thursday. “We will also see markups to the inflation forecasts for some countries.”
The revised outlook highlights the economic toll of President Trump’s expansive use of tariffs since assuming office in January. His administration has imposed levies on a wide range of goods from key trading partners, including China, Canada, and Mexico, sending shockwaves through global supply chains and heightening uncertainty for international businesses.
While Georgieva was measured in her critique, she underlined the long-term dangers of protectionist policies, warning that they undermine productivity and disrupt the stability needed for sustained growth.
Her concerns echo a wave of similar sentiments from major financial institutions. Earlier this week, the European Central Bank lowered interest rates, citing deteriorating growth prospects due to escalating trade tensions. Meanwhile, the heads of the Federal Reserve and World Bank have also voiced concern about the implications of aggressive trade actions on global economic stability.
Central bankers, finance ministers, and economic policymakers are set to convene in Washington next week to discuss coordinated responses to the challenges posed by current trade policies and to explore strategies for safeguarding global financial stability.
With the global economy at a crossroads, the IMF’s warning adds urgency to the calls for a reconsideration of unilateral trade actions and a renewed commitment to multilateral cooperation.