The head of the IMF does not provide for a global recession. But Trump's duties will slow down the economy

The head of the International Monetary Fund (IMF) Kristalin Georgiewa assessed on Thursday that the duties introduced by US President Donald Trump will have an impact on the global economy and cause a significant slowdown this year, but they will not lead to recession.

“In connection with the uncertainty caused by the trade war, our growth forecasts are significantly lower, but they do not show recession,” said Georgiev in her traditional speech before the spring meetings of the IMF and the World Bank, the first of which will take place on Tuesday.

Georgiewa paid special attention to commercial tension between the USA and China, which in recent days raised to record levels of mutual duties – Washington to 145 percent, and Beijing to 125 percent.

“It will have consequences, because while large countries are fighting with each other, smaller countries are in the cross. China, the European Union and the United States are the greatest importers. As a consequence, this can cause huge side effects for the rest of the world,” the head of the IMF warned.

According to her, the reaction to this situation “should be very intelligent”, and the trade war gives the opportunity to create a “more balanced and resistant to crises of the world economy”, which requires all countries to “organize your affairs” because “there is no room for postponing the necessary reforms.”

The solutions recommended by Georgiewa included “ambitious reforms of the banking sector, capital markets, competition rules, intellectual property rights and adaptation to the applications of artificial intelligence.”

Last week, Trump suspended all duties for 90 days introduced to a number of countries around the world (except China), but the minimum 10 % minimum rate, as well as 25 %. The rates applied by the US on steel and aluminum and the car industry. (PAP)

ZM/ MMS/