By Andrea Shalal, David Lawder
WASHINGTON (Reuters) -U.S. President Donald Trump’s push for sweeping tariffs is creating great uncertainty and denting confidence but is not likely to trigger a near-term recession, International Monetary Fund Managing Director Kristalina Georgieva said on Monday.
“We are not seeing a dramatic impact” yet from the tariffs implemented and threatened so far by Trump since his return to the White House, Georgieva said in a Reuters NEXT Newsmaker interview. The IMF will likely lower the economic outlook slightly in its next World Economic Outlook update in about three weeks, but “we don’t see recession on the horizon.”
The IMF in January nudged up its global economic growth estimate for 2025 to 3.3% from 3.2% in its previous estimate in October, with a half percentage-point upgrade to the U.S. outlook to 2.7% accounting for most of that uptick.
Now, though, Georgieva expects the WEO update due in April when the IMF holds its spring meetings in Washington to reflect a small downward “correction” to those estimates, she said.
Since returning to the White House in January, Trump has imposed 20% tariffs on all goods from China; threatened and then delayed 25% tariffs on most goods from Canada and Mexico; launched steep levies on steel and aluminum imports; announced 25% tariffs on imported automobiles; and has declared that April 2 will be “Liberation Day,” when he plans to unveil global reciprocal tariffs.
The unpredictable pace of the announcements and implementation of the levies has soured investors’ attitudes, and major U.S. stock indexes are down by nearly 10% since mid-February on concern the tariffs will slow growth or even trigger a recession.
The longer the uncertainty persists about Trump’s approach to tariff policy, the greater the risk to the outlook, Georgieva said.
“The sooner there is more clarity, the better, because uncertainty, our research shows, the longer it goes, the more it may negatively impact growth,” she said.
(Reporting by Andrea Shalal and David Lawder in WashingtonWriting by Dan BurnsEditing by Matthew Lewis)
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