The global economy has proven more resilient than expected

Kristalina Georgieva

Kristalina Georgieva, Director of the International Monetary Fund, said on Wednesday that the global economy has proven more resilient than expected despite the severe pressures resulting from multiple shocks, expecting only a slight slowdown in global growth this year and through 2026.

Georgieva added that America avoided a recession that many experts feared only six months ago, noting that the American economy and many other economies have withstood better policies, a private sector more able to adapt, import tariffs that are less severe than what was feared at least at the present time, and supportive financial conditions, according to the text of her statements at an event at the Milken Institute in Washington.

She also added in a preview of the International Monetary Fund’s upcoming report on global economic outlook, “We see a slight slowdown in global growth this year and next, and all evidence indicates that the global economy has generally withstood the severe pressures resulting from multiple shocks.”

In July, the International Monetary Fund raised its global growth forecast by 0.2 points to three percent for 2025 and by 0.1 points to 3.1 percent for 2026.

The Fund will issue new forecasts next Tuesday during the annual meetings of the Monetary Fund and the World Bank in Washington.

The meeting is being held amid severe disruptions to global trade as a result of the large customs duties imposed by US President Donald Trump as well as his crackdown on immigration.

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Georgieva stated that the global economy is doing “better than feared, but worse than desired,” noting that the IMF expects global growth of about three percent in the medium term, which is much lower than the 3.7 percent expected before the Covid-19 pandemic.

Georgieva pointed to the presence of deep hidden waves of marginalization, discontent and crises around the world, and said that the global economy faces a range of risks.

Uncertainty has reached exceptionally high levels and continues to rise, while demand for gold, a traditional safe asset for investors, is rising, Georgieva said, adding that gold holdings at monetary authorities now exceed 20 percent of the world’s official reserves.

Gold recorded a record high level with the continued closure of the US government and expectations of a reduction in US interest rates this month, which boosted demand for the precious metal.

The U.S. tariff shock was less severe than initially reported in April, with the trade-weighted U.S. tariff rate now at about 17.5 percent, down from 23 percent in April, and countries largely bypassed countertariffs.

But US tariff rates are constantly changing, and US inflation could rise if companies begin to pass on more tariff costs, or if an influx of goods previously destined for the US triggers a second round of tariff hikes elsewhere.

IMF and tariff concerns