Washington: The managing director of the International Monetary Fund (IMF) expressed confidence that emerging markets possess the resilience required to address the U.S.’s recent announcement of punitive tariffs against many of its trading partners.
According to Agence Kampuchea Presse, Kristalina Georgieva spoke at a joint news conference with Saudi Arabian Finance Minister Mohammed Aljadaan in Washington as the spring meetings of the IMF and World Bank came to a close. She emphasized the significant impact on emerging markets, noting the IMF’s downward revision of growth projections for these economies in their latest World Economic Outlook. Despite this, Georgieva praised the resilience of emerging markets in the face of shocks, highlighting their improved policymaking agility and fiscal and monetary maturity.
Georgieva advised emerging markets to carefully evaluate their policy tools, urging caution in providing fiscal support to maintain fiscal space. She encouraged these economies to pursue reforms t
o strengthen their positions. Aljadaan concurred, acknowledging the limited room for maneuvering in some emerging economies and the lasting impact of unresolved shocks.
Krishna Srinivasan, IMF’s Asia and Pacific Department director, highlighted the region’s substantial exposure to the U.S. market and the implications of high tariffs. He urged increased intraregional trade among ASEAN members as a strategy to diversify exports and mitigate the impact of external demand fluctuations. Srinivasan pointed out the high tariff rates imposed on ASEAN economies, with developing nations like Cambodia, Laos, Myanmar, and Vietnam facing significant levies.
The remarks underscore the challenges and potential strategies for emerging markets in navigating the current global trade tensions.