Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
Global economic outlook: Is a recession already here?
“We’re heading toward a substantial U.S. recession,” said Robert Kahn, Eurasia Group’s Managing Director, Global Macro. “We may even be in one now.”
That notion challenges the official economic outlook released this week by the International Monetary Fund, which was more cautious in its assessment. However, it more closely mirrors what experts are saying in the halls at the IMF-World Bank Spring Meetings currently underway in Washington, D.C.
In a conversation with GZERO’s Tony Maciulis, Kahn explained the state of the global economy before President Donald Trump’s April 2 “Liberation Day” and where things stand now. Unlike past crises triggered by external shocks, this one, he argues, is driven by the U.S. administration’s abrupt and sweeping trade policy changes, alongside tension between the White House and the Federal Reserve. These factors make the downturn both unpredictable and unprecedented.
“We don’t have a model for this,” Kahn said. “There’s no course I took in school that’s directly relevant to what we’re living with.”
This conversation is presented by GZERO in partnership with Microsoft from the IMF-World Bank Spring Meetings in Washington, D.C. The Global Stage series convenes global leaders for critical discussions on the geopolitical and technological trends shaping our world.
Pierre-Olivier Gourinchas speaks during a press briefing on the World Economic Outlook during the 2025 World Bank and IMF Spring Meetings on April 22, 2025 in Washington, DC.
IMF downgrades growth outlook
“Just since January, we’ve entered into a new era,” IMF’s Chief Economist Pierre-Olivier Gourinchas told the press Tuesday at the Spring Meetings of the International Monetary Fund and World Bank. He explained why the IMF had just downgraded global economic growth expectations for 2025, from 3.3% to 2.8%, and global trade growth by more than half, from 3.8% last year to 1.7%.
Why? Global tariff rates are at their highest level since the Great Depression, following Donald Trump’s imposition of a 10% tariff on nearly all imports, along with duties of at least 145% on Chinese goods entering the United States. In a closed-door session with investors at a JP Morgan conference on Tuesday, US Trade Secretary Scott Bessent said that while the US will eventually de-escalate the trade war with China, negotiations with Beijing have yet to begin — and the process, he warned, will be a “slog.”
But an eventual de-escalation won’t alleviate concerns. “Beyond the tariffs themselves, the surge in policy uncertainty — related to trade policy but also more broadly — is a major driver of the economic outlook,” Gourinchas said. As a result, the US saw the sharpest downgrade among wealthy economies, with its expected 2025 growth falling from 2.7% to 1.8%.
Gourinchas notes that the downgrade could be temporary — if tariffs are rolled back and policy stability returns — but the IMF has raised the likelihood of a US recession this year to 40%, up from 25%.
All eyes are now on signals from the White House. Anticipation is building for Wednesday, when the Trump administration is expected to officially weigh in — and potentially upend the conversation. The administration has been hostile to international organizations like USAID and the United Nations, and some fear that the World Bank or the IMF could be next on the chopping block. Bessent is set to address the Institute of International Finance in the morning, followed by a high-stakes dinner with G20 leaders that evening.
GZERO will be watching to see how he responds to the IMF’s downgrade — and whether he offers any guidance to the institution itself. Some expect the Trump administration to urge the IMF to return to its traditional focus on balance of payments and debt crises, moving away from more progressive initiatives like supporting climate adaptation or promoting gender equality.
Senegal's Presidential Bassirou Diomaye Faye casts his ballot during the early legislative election, at a polling station in Ndiaganiao, Mbour, Senegal on Nov. 17, 2024.
Senegal goes to the polls
Back in March, Faye secured 54% of the vote in the presidential election, making him Africa’s youngest elected leader at the age of 44. His victory came less than two weeks after being released from prison. Both Faye and his mentor Ousmane Sonko had been jailed onpolitically motivated charges, spurring months of protests in which dozens of people were killed and about 1,000 people were incarcerated.
Faye now faces the Takku Wallu opposition party led by former President Macky Sall, as well as 39 other registered parties and coalitions. Analysts expect Faye’s party, PASTEF, to secure the 83 seats required for a parliamentary majority. Faye and Sonko campaigned on a left-wing pan-African vision, promising to diversify partnerships and reassess hydrocarbon and fishing deals. He will also have to tackle a debt crisis, as a $1.9 billion IMF program is on hold pending a government audit.
Provisional results are expected Monday morning, with a final count to be published later in the week.
UN's Rebeca Grynspan on the world’s debt crisis: Can it be solved?
Today, around 3.3 billion people live in countries spending more on debt than on essential services like education and healthcare, and governments worldwide are struggling to pay these debts. Rebeca Grynspan, secretary-general of the UN Conference on Trade and Development, warns of looming trade wars and faltering financial systems designed to reduce global poverty and promote development. What will it take to get countries back on track? Grynspan shares insights on this, highlighting the roles of the UN General Assembly and the International Monetary Fund in a Global Stage interview with GZERO’s Tony Maciulison the sidelines of the 7th annual Paris Peace Forum.
Watch out for more coverage of the Paris Peace Forum from GZERO this week.
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.
Hot topics at the IMF-World Bank meetings
Delegates at the IMF and World Bank Annual Meetings have been giving rosy outlooks to the press while the cameras are rolling, but GZERO Senior Writer Matthew Kendrick heard a different story in private settings. He told Tony Maciulis that the global outlook depends heavily on US policy continuity — which is highly unlikely under a second Trump administration — and successful efforts in China to revive its own floundering economy.
It’s not all doom and gloom, though. Delegates are eager to point to success stories, including in Ukraine and Sub-Saharan Africa, highlighting how the world’s leading development banks can make a real impact on some of the most fragile economies and vulnerable populations.
Watch to learn more about what Matt heard on the ground.
Watch more from Global Stage.
Can the IMF change to help more women?
When a country hits rock bottom financially, the International Monetary Fund is meant to step in with funds to stabilize the economy without damaging its society — or the gender gap. But studies show that these programs often push women out of work at a disproportionate rate to men as the economy contracts.
Alongside this week’s World Bank-IMF Annual Meetings in Washington, DC, the IMF held a policy forum on Tuesday to discuss a new tool called Gender Impact Assessments, which are designed to help build more equitable programs — and protect some of the world’s most vulnerable women.
How do IMF programs hurt women’s opportunities? In any intervention, the IMF has to consider political practicalities in its policy recommendations. All too often, said Farah Al Shami, program director for social protection at the Arab Reform Initiative, “Austerity is politically easier than implementing tax reform.” Citing examples of governments in the Middle East and North Africa, which already spend proportionally less than peer countries on social services and safety nets and have higher female unemployment, she explained that austerity measures push more women than men out of the workforce as the economy contracts, while also reducing the benefits they need. Even more politically palatable ways to raise revenue, like value-added taxation, can disproportionately burden poor women due to their regressive nature.
Why are women forgotten? Tara Povey, the gender equality and macroeconomics project lead at the Bretton Woods Project, said the approach to gender has been too “scattershot” and often falls down the priority list in negotiations. The IMF’s Gender and Inclusion Deputy Unit Chief Monique Newiak, meanwhile, said that even when gender considerations are taken into account, too much of the focus is placed on metrics like labor force participation and not enough on social aspects like child marriage and gender-based violence.
How could Gender Impact Assessments help? By reorganizing the program development process to include key questions about women — including whether policies could force more unpaid family labor on women, monopolize women’s time, or lead to more hiring discrimination — the IMF can begin tailoring more inclusive programs. Rather than suffering social setbacks, the Fund could ensure that women are at the very least not harmed, and ideally set up for greater success in a recovered economy.
Ukrainian central bank head Andriy Pryshnyy (right) at the 2024 IMF/World Bank Annual Meetings in Washington, DC. Oct. 23, 2024
Ukraine secures fifth round of IMF funding, but less talk of reconstruction
The International Monetary Fund announced Wednesday that Ukraine had successfully completed the fifth revision of its financing program and will receive $1.1 billion to support its non-military budget. This is a major achievement for Kyiv and has required extensive reforms while at war. It’s a war that has not gone well in the last year to boot, and talk about reconstruction — and the IMF and World Bank’s roles therein — has diminished as a result.
Notably absent from this year’s IMF/World Bank Annual Meetings is a marquee discussion of funding for Ukraine’s reconstruction efforts. IMF Managing Director Kristalina Georgieva wrote that Ukraine’s “recovery is expected to slow amid headwinds from the impact of the attacks on energy infrastructure and the continuing war, while risks to the outlook remain exceptionally high.”
Ukraine’s central bank chief Andriy Pyshnyy emphasized the importance of contingency planning under such circumstances, and continuing reforms even if the military situation worsens. Ultimately, they will help Ukraine meet the standards necessary to join the EU — and Kyiv sees greater integration with the West as the best, if not only, way to achieve long-term security.
“Uncertainty is our new reality,” said Pyshnyy at a press event on Wednesday. He credited the IMF’s responsiveness and his own staff’s grit in helping the country overcome panic and anxiety when Russia invaded, and he has set in motion plans to increase the country’s financial resilience.
Maintaining public confidence in the banking system by making sure everyone can access their money when they need it is crucial to keeping the Ukrainian economy afloat. Ukraine’s banks are now capable of functioning in blackout conditions, which has prevented panic withdrawals. The violence has also left many Ukrainians disabled, which has led to changes Pyshnyy said he hopes will lead Ukraine’s “financial system to be the most accessible in the world.”
“We believe in our victory,” said Pyshnyy. “We believe that tomorrow can be better than today.”