The weekend strikes amplified what Kristalina Georgieva called an already “highly uncertain environment.”
The IMF is watching for further upward impact on oil and natural gas prices and for any disruption to global energy supplies from the conflict in the oil-rich Middle East, she told Bloomberg TV.
But beyond those two main risks, “there could be secondary and tertiary impact,” Georgieva said.
“Let’s say there is more turbulence that goes into hitting growth prospects of large economies, and then you have a trigger impact in a downward revision of prospects for global growth.”
“When you look at the probabilities, still there is a higher probability that (the) US in this year may avoid recession. But please, let’s not rock the boat any further,” Georgieva added.
Those large economies include the US where the IMF sees a nearly 40% chance risk of recession this year, based on its latest forecasts, released in April. This estimate is gloomier than the fund’s previous projection, published in October, before dramatic tariff increases announced by the Trump administration.
“The more there is uncertainty, the more there is volatility, the worse it is for business. When there is uncertainty, what happens? Investors don’t invest, consumers don’t consume and that holds growth prospects down,” she continued.
