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Despite major shocks like the President’s, the global economy is in better shape than expected donald trumpbut the head of the International Monetary Fund says that flexibility cannot last.
“Girt your loins,” Managing Director Kristalina Georgieva said in prepared comments to a think tank on Wednesday. “Uncertainty is the new normal and it is here to stay.”
His comments at the Milken Institute came a day after gold prices topped $4,000 an ounce for the first time, as investors look for a safe haven from a weak dollar and geopolitical uncertainty. International Monetary Fund And world bank Hold your annual meetings next week WashingtonTrump’s trade penalties are expected to be a special focus when global finance leaders and central bankers gather.
The worldwide economy is projected to grow 3% this year, and Georgieva cites a number of factors as to why it might not fall below that: countries have made decisive economic policies, the private sector has adapted and tariffs have proven less severe than originally feared.
“But before anyone breathes a huge sigh of relief, please hear this: global resilience has not yet been fully tested. And there are worrying signs that the test may be coming. Just look at the surging global demand for gold,” she says in her prepared remarks.
On Trump’s tariffs, she says, “The full impact is yet to emerge. In the US, margin compression could pave the way for greater price pass-through, leading to inflation with implications for monetary policy and growth.”
The Republican administration in April imposed import taxes on almost all US trading partners, including Canada, Mexico, Brazil, China and even the small African country of Lesotho. “We are the kings of being harassed by tariffs,” Trump said during a meeting with Canadian Prime Minister Mark Carney in the Oval Office on Tuesday.
While the US has announced some trade frameworks with countries like the United Kingdom and Vietnam, the tariffs have created uncertainty around the world.
“Elsewhere, a flood of goods already destined for the U.S. market could trigger a second round of tariff increases,” Georgieva says.
The Supreme Court will hear arguments next month on whether Trump has the authority to impose some of his tariffs under the International Emergency Economic Powers Act.
In her wide-ranging comments, Georgieva points to the discontentment of youth around the world as many young people envision a future where they will earn less than their parents. She is also calling for greater internal trade in Asia, more business-friendly changes in Africa and greater competitiveness in Europe.
to the United States. Georgieva is urging the government to address the federal debt and encourage household savings.
The IMF is a lending organization of 191 countries that seeks to promote global growth and financial stability and reduce poverty.