IMF Chief Says Global Economy Is “Doing Better Than Feared,” But Risks Linger

The head of the International Monetary Fund, Kristalina Georgieva, said the global economy is showing unexpected resilience despite heavy pressure from trade tensions, debt burdens, and financial volatility. She projected only a slight slowdown in growth in 2025 and 2026, signaling cautious optimism amid uncertainty.

Georgieva noted that recent developments—such as lower-than-expected tariffs, adaptive private sectors, and supportive policies—have helped many economies avoid a harsher downturn. She highlighted that the IMF now expects 3.0% growth in 2025 and 3.1% in 2026, slightly ahead of earlier forecasts.

However, the optimism was tempered by warnings of persistent dangers. Global public debt is projected to exceed 100% of GDP by 2029, Georgieva said, while financial markets show signs of overvaluation reminiscent of past bubbles. She cautioned that sudden shifts in market sentiment or renewed trade shocks could test the fragile stability.

In her remarks, Georgieva urged governments to focus on productivity reforms, fiscal consolidation, and structural balance across regions. She called on Asia to deepen internal trade and boost their service sectors, Europe to advance integration, Sub-Saharan Africa to enhance business environments, the U.S. to address its debt trajectory, and China to rebalance spending toward social welfare and away from industrial subsidies.

Her “better-than-feared but worse-than-needed” framing encapsulates the current global economic dilemma: avoiding a collapse does not equal thriving growth. As the IMF prepares to publish its full World Economic Outlook next week, the window for preventative policymaking is narrow.