The International Monetary Fund’s upcoming growth forecasts are expected to show that the global economy remains resilient despite trade disruptions and geopolitical tensions, IMF Managing Director Kristalina Georgieva said in an interview with Reuters. Speaking during a visit to Kyiv ahead of the release of the IMF’s World Economic Outlook update, Georgieva described current global growth as “fairly strong,” suggesting the Fund could slightly upgrade its projections once again.

Growth Forecast Outlook

In October, the IMF revised its 2025 global growth forecast upward to 3.2%, from 3.0% earlier in the year, after determining that the impact of U.S. tariffs was less damaging than initially feared. The outlook for 2026 was left unchanged at 3.1%. Georgieva indicated that the January update, due on January 19, would likely reinforce this trend, showing that trade shocks have not derailed global growth even as risks remain tilted to the downside.

Trade Shocks and Tariffs

Georgieva pointed out that the economic impact of U.S. tariffs imposed by President Donald Trump has so far been limited. Overall tariff levels were lower than initially threatened, and the United States accounts for only around 13–14% of global trade. The absence of widespread retaliatory tariffs from other countries has also helped contain broader economic fallout, supporting continued global expansion.

Geopolitical and Technological Risks

Despite near-term resilience, Georgieva warned that risks to the global economy are increasing, particularly from geopolitical tensions and rapid technological change. She cautioned that massive investments in artificial intelligence could lead to financial distress if promised productivity gains fail to materialize. According to Georgieva, policymakers and businesses are often behaving as though global conditions remain predictable, despite a much more volatile international environment.

Financial Buffers and IMF Lending

Georgieva expressed concern that many countries remain poorly prepared for future shocks, having failed to build sufficient fiscal and financial buffers. The IMF currently has around 50 active lending programs, already a historically high number, and expects more countries to seek financial assistance if global conditions worsen. This raises concerns about debt sustainability and long-term economic resilience, particularly in developing and fragile economies.

U.S. Economic Performance

The IMF chief described U.S. economic performance as “quite impressive” given the scale of trade measures imposed last year. She noted that inflation and macroeconomic stability could still deteriorate if trade tensions escalate further, but for now, the U.S. economy has shown notable adaptability amid global uncertainty.

A World of Repeated Shocks

Reflecting on her tenure since taking office in late 2019, Georgieva emphasized that the global economy has faced a continuous series of crises, from the COVID-19 pandemic to wars, inflation surges, and trade disruptions. She warned that this pattern of repeated shocks is becoming a structural feature of the global system rather than an exception.

Analysis

The IMF’s assessment highlights a paradox at the heart of today’s global economy: resilience without security. Growth has endured despite tariffs, wars, and supply-chain disruptions, but this resilience rests on fragile foundations, including rising debt, geopolitical fragmentation, and uncertain technological returns. From a political economy perspective, the relative absence of retaliatory trade measures has helped prevent a downward spiral, but this restraint may not hold indefinitely. If geopolitical rivalry deepens or AI investment fails to deliver productivity gains, the current stability could quickly give way to systemic stress. The IMF’s warning is therefore less about imminent collapse and more about complacency in an increasingly shock-prone world.

With information from Reuters.