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International Monetary Fund Managing Director Kristalina Georgieva delivers remarks on the global economy ahead of the IMF/World Bank Spring Meetings, at the IMF headquarters in Washington, DC, on April 17, 2025.
World Bank and IMF Spring Meetings kick off amid AI transformation and global instability
What’s at stake? The effects of tariffs are high on the agenda. In her opening remarks on Friday, IMF Managing Director Kristalina Georgieva made clear the economic risks posed by escalating trade tensions and inconsistent US tariff policies. She emphasized that smaller economies are particularly vulnerable to external trade shocks. The core of her message: The years of countries relying on US consumer demand to drive their growth may be coming to an end, and the global economy needs to adapt.
Meanwhile, the fate of both institutions is also being whispered about, thanks to Project 2025, a conservative policy blueprint developed by the Heritage Foundation that calls for ending US funding for the IMF and the World Bank. However, neither the president nor Treasury Secretary Scott Bessent — who is set to discuss the administration’s stance on these institutions on Wednesday — has shown any intention of implementing this proposal.
Why might they be spared? Both institutions offer financial support to struggling countries, but unlike the recently defunded USAID, they are not charities. Instead, they provide loans, which may shield them from any US spending cuts.
What to expect: As the institutions await direction from their primary donor, this week’s meetings are expected to focus on artificial intelligence — exploring how it can drive prosperity instead of destroying jobs — along with the global economic outlook amid growing instability.
We will be on the ground covering all of the action. Look for dispatches in GZERO Daily and on our Youtube, LinkedIn, and Instagram channels for the latest.IMF Managing Director Kristalina Georgieva speaks to the media during an International Monetary and Financial Committee press briefing on Friday, Oct. 25, 2024.
IMF and World Bank close annual meetings with urgent call for fragile economies
“The world now faces a low-growth, high-debt trajectory,” said Georgieva. Governments in developing countries now face a “trilemma” of needing to increase spending – sometimes by as much as 14% – while being unable to raise tax revenues as they face fiscal buffers exhausted by the COVID-19 pandemic and its aftermath. And she acknowledged that the Fund’s projections include “a severe, but plausible scenario” in which global public debt could exceed the baseline by some 20%.
That risk is compounded by growing political opposition to free trade, which Georgieva characterized as a “retreat from global economic integration driven by both national security concerns and the anger of those who lost out.” Reduced trade will hamper growth and push countries to borrow more to make up the difference.
These pressures pose the highest risk for sub-Saharan Africa, already struggling with high debt and lacking the levels of growth necessary to get ahead. Speaking at a separate event on Friday, the IMF’s Africa Director Abebe Selassie said the region will likely grow by 4.2% in 2025, well below the 6-7% growth rates enjoyed previously. “This pace is not sufficient to significantly reduce poverty or to recover ground lost in recent years, let alone address the substantial developmental challenges ahead,” he said.
So what can be done? World Bank President Ajay Banga gave an introspective prescription at the closing plenary: Simplify, simplify, simplify. “Development delayed is development denied,” he explained while outlining progress on reducing the time the World Bank takes to approve projects from an average of 19 to 12 months, and faster where possible. The Bank has made a substantial improvement — they’re down to 16 months — but time is money, as the saying goes, and more haste will make the Bank’s programs more effective in Banga’s view.
On the IMF’s side (often more concerned with stabilization than development), Georgieva outlined three tools: rebuilding fiscal buffers in vulnerable economies, investing in growth that can ease debt burdens, and taking a cooperative approach across borders.
Of course, much depends on factors outside the control of these development finance institutions. We’re watching how the results of the US election, the roiling debt and property market problems in China, and the conflicts in Ukraine, the Levant, Sudan, and elsewhere affect the outlook.