Washington, D.C. – The International Monetary Fund (IMF) is calling for increased global cooperation to address escalating trade tensions and build a more balanced and resilient world economy. In a speech delivered April 17, 2025, IMF Managing Director Kristalina Georgieva emphasized the need for countries to strengthen their domestic economies, reduce macroeconomic imbalances, and foster collaboration to navigate a period of heightened uncertainty and frequent economic shocks.
Georgieva highlighted the resurgence of trade tensions, fueled by eroding trust in the international system and perceptions of unfairness. She noted that while global economic integration has lifted millions out of poverty, some communities have suffered from job losses and wage stagnation. These concerns, coupled with national security considerations, have led to increased trade distortions and a shift towards self-reliance, contributing to a more fragmented global landscape.
The IMF anticipates that escalating trade tensions will have significant consequences, including disruptions to trade flows and potential financial market stress. The organization’s upcoming World Economic Outlook will include revised growth projections that reflect these challenges, along with cautions about the risks associated with protracted uncertainty. Georgieva warned that unusual movements in bond and currency markets should be taken as a warning sign, emphasizing that worsening financial conditions will negatively impact all nations.
To mitigate these risks, the IMF urges countries to prioritize strengthening their domestic economies through reforms that enhance economic and financial stability and improve growth potential. This includes taking resolute fiscal action to rebuild policy space, maintaining agile and credible monetary policy, and ensuring strong financial regulation and supervision. Emerging market economies should preserve exchange rate flexibility, while low-income countries require increased support from international partners to improve capacity for reforms and secure crucial financial assistance.
Georgieva also stressed the importance of addressing internal and external macroeconomic imbalances. She urged countries to pursue policies that promote better internal and external balance, thereby supporting collective resilience and wellbeing. Specifically, she called on major economies to undertake reforms and rebalancing efforts to reduce vulnerabilities and mitigate trade tensions.
Ultimately, the IMF emphasized the need for cooperation in a multi-polar world, particularly in trade policy. The goal should be to secure a settlement among the largest players that preserves openness and delivers a more-level playing field, restarting the trend toward lower tariff rates while reducing nontariff barriers and distortions. Policies should also be in place to cushion the blows on those who lose out, ensuring that distributional policies form a fundamental bridge between good economics and good politics.
Georgieva concluded by expressing optimism that the upcoming Spring Meetings of the IMF will provide a vital forum for dialogue and collaboration. She urged all countries to play their part in strengthening the global economy in an era of more frequent and severe shocks, focusing on building a better balanced and more resilient world economy.
