International Monetary Fund Managing Director Kristalina Georgieva has issued a stark warning about the enduring instability facing the global economy, urging stakeholders to prepare for prolonged unpredictability. Speaking at the Milken Institute, she emphasized that while current economic resilience has held up against shocks such as U.S. trade tariffs, this strength may not endure. “Buckle up,” she stated. “Uncertainty is the new normal, and it is here to stay.” n nDespite a projected global growth rate of 3 percent for the year, Georgieva cautioned that underlying vulnerabilities remain. She pointed to decisive policy responses, private sector adaptation, and milder-than-expected tariff impacts as reasons the downturn hasn’t deepened. However, she stressed that the full consequences of U.S. import taxes—imposed on nearly all trading partners including Canada, Mexico, China, and even Lesotho—are still unfolding. These measures could lead to margin compression, inflationary pressures, and broader monetary policy complications within the United States. n nInvestor behavior reflects growing caution: gold prices recently reached $4,000 per ounce, signaling increased demand for safe-haven assets amid a weakening dollar and geopolitical tensions. Georgieva also highlighted the risk of secondary tariff waves, as goods redirected from the U.S. market might trigger retaliatory measures elsewhere. The upcoming U.S. Supreme Court review of presidential authority under the International Emergency Economic Powers Act adds another layer of legal and economic uncertainty. n nBeyond trade, she addressed widespread youth dissatisfaction, noting protests from Lima to Jakarta driven by expectations of lower living standards compared to previous generations. In the U.S., declining intergenerational mobility has fueled discontent, influencing shifts in trade, immigration, and international cooperation. n nGeorgieva called for structural improvements, including greater intra-Asian trade, pro-business reforms in Africa, and enhanced competitiveness in Europe. For the United States, she recommended tackling the rising federal debt—now at $37.64 trillion, up from $380 billion in 1925—and promoting household savings. The Congressional Budget Office estimates that recent tax and spending legislation will add $3.4 trillion to the national debt by 2034. n nAs head of a 191-member organization dedicated to financial stability and poverty reduction, Georgieva underscored the need for coordinated global action. Her remarks precede the IMF and World Bank annual meetings in Washington, DC, where trade policies are expected to dominate discussions among finance leaders and central bankers. n
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‘Buckle up’: IMF chief warns of economic uncertainty
The global economy is holding up better than expected despite major shocks such as United States President Donald Trump’s tariffs, but that resilience may not last, the head of the International Monetary Fund (IMF) says. n n“Buckle up,” Managing Director Kristalina Georgieva said in a speech at the Milken Institute think tank on Wednesday. “Uncertainty is the new normal, and it is here to stay.” n nRecommended Stories n nlist of 4 items n nlist 1 of 4Canada’s Carney and Trump meet at the White House as trade tensions loom n nlist 2 of 4Jury orders Johnson & Johnson to pay $966m in talc cancer case n nlist 3 of 4Tesla unveils new lower-cost Model Y amid rising competition n nlist 4 of 4Why gold’s historic rally is about more than just Trump n nend of list n nHer comments come on a day when gold prices hit $4,000 an ounce for the first time as investors seek safe havens from a weaker dollar and geopolitical uncertainty. She spoke before the IMF and World Bank hold their annual meetings next week in Washington, DC. Trump’s trade penalties are expected to be in sharp focus when global finance leaders and central bankers gather. n nThe global economy is forecast to grow by 3 percent this year, and Georgieva is citing a number of factors for why it may not slip below that: Countries have put in place decisive economic policies, the private sector has adapted and the tariffs have proved less severe than originally feared. n n“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. n nOn Trump’s tariffs, she said: “The full effect is still to unfold. In the US, margin compression could give way to more price pass-through, raising inflation with implications for monetary policy and growth.” n nThe Republican US administration imposed import taxes on nearly all US trading partners in April, including Canada, Mexico, Brazil, China and even the tiny African nation of Lesotho. “We’re the king of being screwed by tariffs,” Trump said on Tuesday in the Oval Office during a meeting with Canadian Prime Minister Mark Carney. n nWhile the US has announced some trade frameworks with nations such as the United Kingdom and Vietnam, the tariffs have created uncertainty worldwide. n n“Elsewhere, a flood of goods previously destined for the US market could trigger a second round of tariff hikes,” Georgieva said. n nThe US Supreme Court next month will hear arguments about whether Trump has the authority to impose some of his tariffs under the International Emergency Economic Powers Act. n nSpillover effect n nIn her wide-ranging remarks, Georgieva pointed to youth discontent around the world as many young people foresee a future in which they earn less than their parents. n n“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.” n nShe also called for greater internal trade in Asia, more business-friendly changes in Africa and more competitiveness in Europe. n nFor the US, Georgieva urged the government to address the federal debt and encourage household saving. n nThe national debt is the total amount of money that the federal government owes to its creditors. The US federal debt has increased from $380bn in 1925 to $37.64 trillion in 2025, according to US Department of the Treasury data. n nThe Congressional Budget Office reported in July that Trump’s new tax and spending law will add $3.4 trillion to that total through 2034. n nThe IMF is a 191-country lending organisation that seeks to promote global growth and financial stability and reduce poverty.