International Monetary Fund:Daily Briefing: Spring Meetings | April 22

 

Dear MARIA, welcome to the April 22 briefing from the Spring Meetings In the first of our daily briefings from the IMF's 2025 Spring Meetings, we spotlight risks to global growth, financial stability risks, rising global debt, the rise of the "silver economy," corporate sector vulnerabilities, and much more as we mark the beginning of the IMF-World Bank Spring Meetings. FULL SCHEDULE (Credit: IMF Photo/Sarah Silbiger) Global Economy To Slow But Escape Recession A sharp increase in trade tariffs will slow global growth significantly this year and next but the world economy will not slide into recession, the IMF’s chief economist said on Tuesday.  Pierre-Olivier Gourinchas announced sweeping downgrades to the IMF’s growth forecasts and said world trade growth would be cut in half this year to reflect a “reset” of the global trading system, with US effective tariffs at the highest level for more than a century.  The World Economic Outlook includes a “reference forecast,” which reflects policy announcements by the US and trading partners up to April 4, including the April 2 tariffs and initial responses. Under this forecast, global growth will slow to 2.8 percent this year and 3 percent next year, a cumulative downgrade of about 0.8 percentage point relative to the IMF’s previous set of projections, in January.  “While global growth remains well above recession levels, all regions are negatively impacted,” Gourinchas told a press briefing. He added that the probability of a world recession—that is, global growth falling below 2 percent—had almost doubled, to 30 percent from 17 percent in October. World trade growth will slow from 3.8 percent last year to 1.7 percent this year, according to IMF forecasts.  Gourinchas called for a stable trading environment that addresses longstanding gaps in international trading rules.  He added: “Growth prospects could immediately improve if countries ease from their current trade policy stance, and promote a new, clear, and stable trade environment.”  Read More: World Economic Outlook | Pierre-Olivier’s blog, The Global Economy Enters a New Era  Learn More NUMBER OF THE DAY Global growth is projected to drop to 2.8 percent in 2025 and 3 percent in 2026—down from 3.3 percent for both years in the January 2025 WEO Update. More in the latest World Economic Outlook.    2.8%   ECONOMIC GROWTH (Credit: IMF Photo) Financial Stability Risks Have Risen, With Vulnerabilities Ahead Global financial stability risks have increased significantly as global financial conditions tightened and economic and trade policy uncertainty remain elevated, according to Tobias Adrian, director of the IMF's Monetary and Capital Markets Department. At the same time, Adrian and the GFSR team pointed out that, despite the increase in volatility and downward trend in prices, market functioning has been normal. “We haven’t seen interventions by central banks, and market interventions have been very orderly,” Adrian said. Some of the repricing is happening after years of strong appreciation, and with price/equity rations still fairly high, he also noted. Adrian outlined his assessment Tuesday in a briefing detailing the analysis in the latest Global Financial Stability Report, citing three key forward-looking vulnerabilities: First, despite recent turmoil, high valuations in some sectors could pull back if the economic outlook worsens. In emerging economies, tightening global financial conditions could weigh on currencies, asset prices, and capital flows. Second, market volatility could strain financial institutions, especially those with high leverage. Asset managers have deeper links with the banking sector that raises the risk of some nonbank financial institutions deleveraging if they face margin calls or redemptions. Third, sovereign bond markets may see more turbulence, especially in countries with high debt levels. Emerging economies, already facing the highest financing costs in a decade, may need to refinance debt and fund government spending at higher costs. Given these conditions, Adrian said policymakers should prepare for financial instability. That means ensuring market functioning, prudential supervision and regulation of financial institutions, and emergency liquidity and crisis resolution tools, he said. Learn More (Credit: IMF Photo/Erin Scott) Risks of Rising Global Debt Global public debt is increasing. It exceeded $100 trillion in 2024—about 93% of global GDP—and is expected to rise further, potentially reaching 100% by 2030. Looking ahead, rising trade and geopolitical uncertainty, tighter financial conditions, and spending pressures could exacerbate fiscal pressures and lead to lower growth In an Analytical Corner session, economist Faizaan Kisat explains how the new “debt-at-risk” framework assesses all potential future paths of public debt. Using data from 47 major economies, the model predicts global debt could exceed 115% of GDP by 2027 in adverse scenarios. These debt levels have not been seen since World War II. Debt risks vary by country group - emerging markets face rising risks from political and economic uncertainty, while advanced economies are more affected by financial conditions.  The framework serves as an early-warning tool, emphasizing the urgent need to reduce global debt vulnerabilities. But the good news is that policymakers can mitigate risks through gradual fiscal consolidation and growth-friendly policies.  Learn More (Credit: IMF Photo/Alyssa Schukar) Healthy Aging Can Counter Demography’s Drag on Growth Population aging poses economic and fiscal challenges in many corners of the world, but governments can counter demographic pressure by helping older workers to stay healthy and productive for longer, IMF economists Andresa Lagerborg and Eric Huang told an Analytical Corner audience on Tuesday.  Presenting the findings of Chapter 2 of the World Economic Outlook, Lagerborg and Huang said that a recent trend of healthy aging and improved cognitive capacity could boost countries’ growth by 0.3 to 0.6 percentage points per year in the medium term. “That might not sound huge at first, but it amounts to roughly 15 percent of the world’s historical growth rate—so it’s a meaningful lift,” Lagerborg said.  Some countries would benefit more than others. In India, health policies would provide the greatest lift to growth. Countries including Greece and Italy where people tend to stop working younger would benefit more from later retirement.  “With the right actions, we can create opportunities to build stronger, more resilient economies,” said Huang.  Check back here for the link to the recording. Read More: World Economic Outlook Chapter 2 | Panel discussion with the IMF’s Bertrand Gruss and the London Business School’s Andrew Scott.  (Credit: IMF Photo/Alyssa Schukar) Corporate Sector Vulnerabilities in a High-Rate World: Growing Risks to Financial Stability What happens when businesses struggle to refinance in a world of high interest rates? What does a high-rate world mean for the corporate sector and the financial system? Many firms borrowed heavily when interest rates were very low before the pandemic, expecting cheap credit to last. But now, refinancing is a serious challenge  The IMF’s Bruno Albuquerque and Anjum Rosha tackled these issues in an Analytical Corner session, noting that corporate vulnerabilities take many forms. They focused on three in their session: the prevalence of so-called “zombie firms;” the impact of higher costs of refinancing debt; and the risks to financial stability arising from corporate defaults and bankruptcies.   They presented simulations, stressing that corporate vulnerabilities can destabilize the financial system, as seen in the past. But by focusing on crisis preparedness, countries can build resilience to shocks. Smart policy choices—better insolvency frameworks, stronger oversight, closing regulatory gaps—can turn vulnerabilities into resilience, said the presenters.   Watch here (Credit: IMF Photo/Allison Robbert) Fund Programs Help Countries Regain International Market Access  IMF arrangements are successful in reducing sovereign bond spreads and restoring access to international markets, IMF economist Joe Kogan said at an analytical corner presentation. His study of 87 IMF arrangements between 2002 and 2022 found that spreads fell after IMF Board approval of an arrangement and dropped by 45 percent within 4 years, recovering most of the spread increase from the crisis. Aside from the financing itself, the type of reforms the IMF encourages—such as debt sustainability—also help countries regain access to international markets, Kogan added.  “The results of our research are really quite positive. The IMF has always operated under the assumption that temporary financing would give a country breathing room to implement recommended reforms and put the economy back on track. By examining a large sample of IMF arrangements, we found that this really works.”    Check back here for the link to the recording. (Credit: IMF Photo) Revenue Mobilization in the Medium Term  At today’s event, participants discussed ways to mobilize revenue while increasing public acceptance of tax reforms. They emphasized the importance of broadening the tax base and improving enforcement to raise the tax-to-GDP ratio. Using digital tools—including AI and new invoicing systems—has helped collect more revenue without increasing tax rates. In Pakistan, for example, the number of tax filers doubled from 2 million to 4 million in recent years, as Muhammad Aurangzeb reported.  Carlos Fernández added that automation has helped combat corruption and build trust in Paraguay’s tax system. He emphasized that taxes should be easy and convenient to pay. Pablo Saavedra highlighted the need to develop clear expenditure strategies that reinforce social safety nets, and the importance of effectively communicating tax reforms. Being mindful of local context and timing when implementing tax measures is equally important, as Murangwa Yusuf noted.  Check back here for the link to the recording. UPCOMING EVENTS WEDNESDAY, APRIL 23 9:00 AM - 9:45 AM IMF Press Briefing: Fiscal Monitor Governor Talks 10:00 - 10:30 AM | Malaysia 12:00 - 12:30 PM | Argentina 1:30 - 2:30 PM | Kazakhstan 11:00 AM - 12:00 PM ET Seminar: The Future of Crypto 12:30 PM - 1:30 PM ET Seminar: Pathways to Prosperity 2:00 PM - 3:00 PM ET Monetary Policy and Financial Stability in Inflationary Times 3:00 PM - 3:45 PM ET Capacity Development Talk: Leveraging AI Tools for Strategic Central Bank Communications THURSDAY, APRIL 24 9:00 AM - 10:00 AM ET IMF Managing Director Press Briefing on the Global Policy Agenda 10:00 AM - 11:00 AM ET IMF Press Briefing: Asia Pacific Department Governor Talks 11:00 - 11:30 AM | Ethiopia 2:30 - 3:00 PM | Poland 11:30 AM - 1:00 PM ET IMF Press Briefing: Middle East and Central Asia Department 12:30 PM - 1:00 PM ET G20 Press Briefing 1:00 PM - 2:00 PM ET Empowering Data-Driven Policies Through Renewed Partnerships – Launching Data for Decisions Fund Phase II  3:00 PM - 4:00 PM ET New Economy Forum: AI in Labor Markets  3:15 PM - 4:15 PM ET Seminar: Debate on the Global Economy 4:15 PM - 6:15 PM ET New Economy Forum Workshop: AI and GovTech in Public Finance  TODAY'S MEDIA PARTNERS Bloomberg covers the business world like nobody else – with hallmark data journalism, deep, insightful, and sharp reporting across the most important topics of our time.    Sina Finance is China’s most influential financial information service provider, specializing in four key areas: trade, news, data, and services. Renowned for its comprehensive market coverage, Sina Finance delivers 24/7 live updates to over 160 million Chinese investors, while its platform attracts more than 330 million monthly views.  VIRTUAL NEWSSTAND What do you think of the Spring Meetings and our newsletter coverage so far? Share your thoughts and feedback directly by clicking here. Your comments will help inform our agenda and coverage moving forward. Sincerely, IMF 2025 Spring Meetings Team

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