Washington: The International Monetary Fund (IMF) stated that the full effects of U.S. tariff policies will only become apparent at a later date.
In the United States, one effect could be companies passing on higher costs to customers and consumers, thereby fuelling inflation, IMF Managing Director Kristalina Georgieva warned.
She said that this could have consequences for monetary policy and economic growth.
“Elsewhere, a flood of goods previously destined for the U.S. market could trigger a second round of tariff hikes,” she told reporters on Wednesday ahead of the IMF and World Bank’s annual meeting next week.
The resilience of the global economy, she added, has not yet been thoroughly tested by the tariff dispute.
Reflecting on the impact of the tariffs introduced under U.S. President Donald Trump, Georgieva noted that a global trade war had been avoided.
However, she cautioned that this was no reason to breathe a sigh of relief, as the global economy had already suffered a significant blow.
She also highlighted the added difficulty posed by the constantly changing U.S. tariff rates.
In July, the IMF forecast global growth of 3 per cent for the current year, with a projection of 3.1 per cent for 2026.
The IMF and World Bank will begin their annual meeting next Monday, bringing together finance ministers, representatives from the financial sector and central bankers.
On October 14, the IMF is set to release its updated global economic forecast.
