IMF Chief Kristalina Georgieva on Global Economy, Growth & Risks

 By MD Rubel Islamic 

Updated on October 8, 2025 at 9:33 PM (GMT+6)

IMF chief Kristalina Georgieva highlights that the global economy is doing better than feared despite rising risks and uncertainty.

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IMF Chief Says Global Economy Doing 'Better Than Feared,' Risks Remain

H1: IMF and Global Economic Outlook

The International Monetary Fund (IMF), led by Kristalina Georgieva, recently emphasized that the global economy is performing "better than feared," despite facing multiple shocks and uncertainties. According to the IMF, the global growth rate for 2025 is projected at around 3%, slightly lower than pre-pandemic expectations but still a sign of resilience. The world economy has withstood disruptions caused by trade tensions, technological transformations, and geopolitical conflicts.

The IMF’s World Economic Outlook highlights that while growth is modest, it is steady. Countries that have implemented effective fiscal and monetary policies have seen stronger-than-expected outcomes. However, Georgieva warned that uncertainty is the new normal, and risks remain high for both advanced and emerging economies.

H2: Current State of the U.S. Economy

The U.S. economy has avoided the recession predicted by many experts six months ago. Strong financial conditions, improved policy frameworks, and a flexible private sector contributed to this outcome. Despite fears over rising U.S. tariffs and trade disruptions, the overall impact on the economy has been less severe than initially anticipated.

The IMF notes that the U.S. economy’s resilience stems from several factors:

• Low unemployment rates supporting consumer spending
• Businesses adapting to supply chain disruptions
• Targeted fiscal stimulus and manageable inflation

H3: Tariffs and Trade Impacts

Tariffs, particularly the U.S.-imposed ones, remain a concern for global trade. Initially, experts feared that tariffs could derail global supply chains, reduce exports, and raise consumer prices. However, as of now:

The U.S. trade-weighted tariff rate stands at 17.5%, down from 23% earlier in the year

Most countries have avoided retaliatory tariffs

Trade flows have largely stabilized

While the current impact is manageable, a sudden tariff hike or inflationary pressures could slow global growth and affect emerging markets more severely.

H2: Global Economic Risks and Uncertainty

Despite the resilience, the IMF stresses that economic uncertainty remains exceptionally high. Investors are increasingly turning to gold, a traditional safe-haven asset, reflecting caution in financial markets.

Key risks include:

Rising public debt levels globally

Abrupt market corrections reminiscent of the dot-com bubble

Geopolitical tensions affecting trade and energy supplies

The IMF notes that these risks could disproportionately impact developing economies, making it harder for them to sustain growth.

H3: Gold Demand as an Economic Indicator

The surge in gold demand indicates that central banks and investors are hedging against economic shocks. Monetary gold holdings now exceed 20% of global official reserves, reflecting the cautious sentiment prevalent in the current market.

Gold, historically a stable asset, often serves as an early indicator of investor confidence or lack thereof in financial systems. A continued rise in demand could signal persistent global uncertainty.

H2: Fiscal Policies and Public Debt

Sustainable fiscal spending is crucial to maintaining economic stability. The IMF warns that global public debt is expected to exceed 100% of GDP by 2029, posing serious challenges if not addressed proactively.

Governments are urged to:

Consolidate spending and reduce deficits

Boost private-sector investment

Avoid excessive borrowing that limits flexibility in future crises

H3: Boosting Private-Sector Productivity

Increasing private-sector productivity is vital for long-term growth. This can be achieved by:

Encouraging competition and innovation

Supporting entrepreneurship and SMEs

Strengthening labor skills and technology adoption

High productivity not only raises GDP but also generates employment opportunities, fosters inclusive growth, and reduces reliance on public debt.

H2: Regional Economic Outlook

H3: Asia Economic Reforms

Asia has substantial growth potential. The IMF recommends:

Deepening trade integration among Asian countries

Implementing service sector reforms

Reducing non-tariff barriers to boost efficiency

These Asia economic reforms could increase GDP by up to 1.8% in the long term, enhancing regional resilience and competitiveness in the global economy.

H3: Sub-Saharan Africa GDP Growth

For Sub-Saharan Africa, growth can be accelerated through:

Business-friendly reforms and deregulation

Investment in infrastructure, education, and technology

Improved governance and transparency

Such measures could raise the real GDP per capita by over 10%, fostering economic stability and poverty reduction in the region.

H3: Europe Single Market

In Europe, building a single market remains critical. Benefits include:

Enhanced competition and efficiency

Easier cross-border trade and investment

Stronger alignment with global innovations

A consolidated single market can help Europe catch up with the U.S. in terms of private-sector dynamism and productivity.

H3: China Fiscal Spending

China faces multiple economic challenges, including:

Managing fiscal spending on social safety nets

Reforming the property sector

Cutting inefficient industrial policy spending

Redirecting resources to social welfare and infrastructure can create a balanced growth model, supporting both domestic consumption and global economic stability.

H2: Policy Recommendations for the United States

The IMF emphasizes that the U.S. economy should:

Take sustained action to manage public debt

Encourage household savings and retirement planning

Consolidate fiscal policies for long-term resilience

With the debt-to-GDP ratio projected to surpass its post-World War II high, these measures are crucial for maintaining financial stability.

H2: Preparing for Future Crises

To mitigate future shocks, countries must:

Encourage competition and innovation

Strengthen property rights and rule of law

Implement robust financial sector oversight

Maintain accountable institutions

Such steps enhance economic resilience, reduce vulnerability to economic uncertainty, and support sustainable global growth.

H2: Conclusion

In summary, the IMF, led by Kristalina Georgieva, projects that the global economy is performing better than feared, but multiple challenges persist. From U.S. tariffs and rising gold demand to high public debt and regional disparities in Asia, Sub-Saharan Africa, Europe, and China, the world faces a complex economic landscape.

Strategic reforms, fiscal discipline, and increased private-sector productivity are key to sustaining growth. Countries that act proactively will be better positioned to navigate uncertainty, stabilize their economies, and contribute to long-term global prosperity.

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“IMF chief: global economy improving, but risks persist”