IMF chief warns of economic uncertainty, tells the world to ‘buckle up’

The global economy is holding up better than expected despite major shocks, but the head of the International Monetary Fund says that resilience may not last.

“Buckle up,” Managing Director Kristalina Georgieva said in a speech at a think tank Wednesday. “Uncertainty is the new normal and it is here to stay.”

Her comments at the Milken Institute come on a day when gold prices hit US$4,000 an ounce for the first time as investors seek safe haven from a weaker dollar and geopolitical uncertainty and before the IMF and World Bank hold their annual meetings next week in Washington. America’s trade penalties are expected to be in sharp focus when global finance leaders and central bankers gather.

The worldwide economy is forecast to grow by 3.0 per cent this year, and Georgieva is citing a number of factors for why it may not slip below that: Countries have put in place decisive economic policies, the private sector has adapted and the tariffs have proved less severe than originally feared.

“But before anyone heaves a big sigh of relief, please hear this: Global resilience has not yet been fully tested. And there are worrying signs the test may come. Just look at the surging global demand for gold,” she said.