Michelle ThompsonThe International Monetary Fund (IMF) stated that while trade tariff uncertainty is at an all-time high, a global recession is not expected. In its latest economic forecast, the IMF noted a drop in global share prices due to escalating trade tensions and warned of an “erosion of trust” between countries. However, the IMF stopped short of predicting a global recession, mentioning that while growth projections are being revised down, there will be no recession.
The statement follows the announcement of US President Donald Trump’s “Liberation Day” tariffs on April 2, which caused a sharp decline in global stock markets, including a 4.6% drop in the FTSE 100. This uncertainty has led to predictions of a global recession as companies reduce spending, and some countries retaliate with tariffs of their own.
In contrast, the IMF’s outlook remains more optimistic. IMF Managing Director Kristalina Georgieva urged for wise responses, highlighting the potential for a more balanced and resilient global economy. She emphasized the need for countries to address internal economic issues, calling on Europe to reduce trade restrictions within its single market and urging China to expand its social safety net to reduce precautionary saving. She also recommended that the US reduce its national debt.
