World economy not doing as badly as feared, IMF chief says

WASHINGTON

The global economy is doing better than expected, even as it faces prolonged uncertainty and underwhelming medium-term growth prospects, the head of the IMF said.

The world economy is doing "better than feared, but worse than we need," International Monetary Fund Managing Director Kristalina Georgieva told reporters in Washington.

She added that the Fund now expects global growth to slow "only slightly this year and next," propped up by better-than-expected conditions in the United States, and among some other advanced, emerging market and developing countries.

Georgieva's remarks came ahead of next week's gathering of finance ministers and central bank governors at the World Bank and the IMF in Washington.

Trade is once again likely to dominate the agenda at the annual meetings, following U.S. President Donald Trump's decision earlier this year to unleash sweeping tariffs against many trading partners.

"All signs point to a world economy that has generally withstood acute strains from multiple shocks," Georgieva said, pointing to "improved policy fundamentals," the adaptability of the private sector, lower-than-expected tariffs, and supportive financial conditions.

"The world has avoided a tit-for-tat slide into trade war so far," she added.

She noted that the average U.S. tariff rate has fallen from 23 percent in April to 17.5 percent today, while the U.S. effective tariff rate of around 10 percent remains "far above" the rest of the world.

But, she warned, the full effect of those tariffs "is still to unfold," adding that the resilience of the world economy has yet to be "fully tested."