“Buckle up” moment for the world economy
The global economy has shown unexpected strength in the face of significant disruptions like President Donald Trump’s sweeping tariffs. However, International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned on Wednesday that this resilience may be short-lived. Speaking at the Milken Institute, she declared, “Uncertainty is the new normal and it is here to stay.”
Her warning comes as gold prices surged past $4,000 per ounce for the first time, a clear sign of investor anxiety. Safe-haven demand is rising amid a weakening dollar and escalating geopolitical risks. These concerns are expected to dominate next week’s IMF and World Bank annual meetings in Washington, where Trump’s trade policies will likely face scrutiny from global financial leaders.
Global growth holds—for now
The IMF projects global economic growth at 3% for this year, supported by policy responses, private-sector adaptability, and milder-than-expected tariff consequences. Yet Georgieva cautioned against complacency. “Global resilience has not yet been fully tested. And there are worrying signs the test may come,” she said, referencing the surge in gold demand as a symptom of looming instability.
She also warned that Trump’s tariffs—although already impacting global trade—have not yet delivered their full economic effects. In the U.S., she noted that companies may soon begin passing on tariff costs to consumers, potentially stoking inflation and forcing monetary policy adjustments that could harm growth.
Tariff impact spreads uncertainty
The Trump administration has imposed tariffs on a wide range of trade partners including Canada, Mexico, Brazil, China, and even Lesotho. Speaking in the Oval Office, Trump claimed, “We’re the king of being screwed by tariffs,” during a meeting with Canadian Prime Minister Mark Carney. While limited agreements have been reached with countries like the UK and Vietnam, global trade remains clouded by uncertainty.
Georgieva warned that redirected goods from blocked U.S. markets could cause cascading tariff responses elsewhere. The legality of Trump’s tariffs will also face scrutiny, as the Supreme Court is set to hear arguments on whether he overstepped his authority under the International Emergency Economic Powers Act.
Youth unrest and rising debt signal deeper issues
Beyond trade, Georgieva addressed growing global youth dissatisfaction. She cited mass protests from Paris to Jakarta driven by economic frustration and falling intergenerational mobility. “The chances of growing up to earn more than your parents keeps falling,” she noted, adding that this discontent has already contributed to a wave of policy shifts across trade and immigration frameworks.
For the U.S., she recommended confronting the ballooning national debt and encouraging household saving. The federal debt now stands at $37.64 trillion, up from just $380 billion a century ago. The Congressional Budget Office estimates that Trump’s recent tax and spending legislation will add another $3.4 trillion to the debt by 2034.
