The head of the International Monetary Fund, Kristalina Georgieva, has issued a stark warning about the mounting risks facing the global economy, telling policymakers to “buckle up” as uncertainty becomes the new normal. Speaking ahead of the IMF’s annual meetings in Washington next week, Georgieva said the world economy had shown surprising resilience in the face of Donald Trump’s trade war, but pointed to growing signs of strain, including record gold prices and exceptionally high US stock valuations.
Gold topped $4,000 an ounce for the first time on Wednesday, signalling anxiety among investors, while US share prices have surged to fresh highs driven by rocketing valuations for tech firms such as Nvidia and Tesla. Georgieva drew a parallel with the dotcom bubble, warning that today’s valuations were heading toward levels seen during the internet boom 25 years ago. “If a sharp correction were to occur, tighter financial conditions could drag down world growth, expose vulnerabilities, and make life especially tough for developing countries,” she said.
The IMF chief also cautioned that the full economic impact of US tariffs was yet to unfold, after many firms front-loaded exports earlier this year to dodge the levies. While financial markets have broadly remained calm, she said this was “masking but not arresting some softening trends”, and warned that sentiment could turn abruptly. The IMF is urging large economies to address global imbalances, including calling on the US to tackle its spiralling public sector deficit and on China to reform its economy to boost household spending.
Georgieva also offered “tough love” to Europe, urging the EU to appoint a “single market tsar” to accelerate integration and remove border frictions. She highlighted growing public frustration in many countries, with people—especially the young—taking to the streets from Lima to Jakarta, demanding better opportunity.
