• IMF and World Bank urge rapid resolution of global trade tensions to mitigate uncertainty.
• Rising debts in emerging markets heighten vulnerability amid increased U.S. tariffs.
• Global growth forecast for 2025 is downgraded to 2.8% due to trade conflicts.
• Both organizations stress the importance of lowering tariffs to stimulate growth.

At a recent press conference, IMF Managing Director Kristalina Georgieva emphasized the importance of addressing growing trade tensions that are causing significant uncertainty in the global economy. She stated, “major trade policy shifts have spiked uncertainty off the charts,” affecting both investment and consumer spending, which dampens growth prospects. Georgieva called for a constructive approach among countries to swiftly resolve these issues and maintain economic stability, pushing for the reduction of trade barriers. This message aligns with views from the IMF's spring meetings where rising trade tensions were widely acknowledged as detrimental to economic growth and financial stability, according to trtglobal and aa.

As the World Bank's chief economist, Indermit Gill, further elaborated on these challenges, he noted that not only are advanced economies facing sluggish growth due to U.S. tariffs, but emerging markets are also at risk. He pointed out that tariffs—historically at their highest—are exacerbating debt levels and prompting economists to downgrade growth forecasts. With global trade growth projected at just 1.5%, down from 8% in the 2000s, Gill indicated that many developing nations are on the brink of debt distress. Current debt service payments now consume a significant portion of GDP for these countries, indicating a deeper economic crisis, as reported by Reuters and thejakartapost.

The IMF's latest economic outlook predicts a global growth rate of 2.8% for 2025, a 0.5 percentage point drop from earlier forecasts, primarily due to escalating trade conflicts. During the IMF and World Bank meetings, it was remarked that many countries are struggling with economic imbalances that amplify trade tensions, which need addressing to restore stability and growth. Georgieva highlighted the necessity for a trade policy settlement among major economies to remove uncertainties hindering investments. This sentiment echoes throughout various reports from both the IMF and World Bank's analysis, underscoring the urgent need for nations to stabilize their economic conditions, according to Reuters, Reuters, and thejakartapost.

Gill's recommendations for emerging markets include negotiating with the U.S. to reduce their own tariff rates, arguing that this could significantly invigorate their economies. He noted the high stakes as many nations now grapple with high-interest debt burdens that limit their spending on essential services such as education and healthcare, seriously impeding long-term development. The World Bank projects that reducing tariffs could yield positive growth effects, highlighting the critical need for strategic reforms in the face of trade volatility, as reiterated by thejakartapost and Reuters.