The International Monetary Fund welcomed the positive initial dialogue between US President Donald Trump and his Chinese counterpart Xi Jinping, considering that any reduction in tensions and reduction of uncertainty between the two largest economies in the world reflects positively on the global economy.
The Fund’s spokeswoman, Julie Kozak, said during a press conference that communication between the two largest economies at the highest levels is “critically important,” adding that the Fund welcomes any constructive dialogue that would ease trade tensions and reduce uncertainty, as this has a positive impact on the American and Chinese economies and on the global economy as a whole.
Kozak indicated that the global economy is heading towards the “medium scenario” presented by the International Monetary Fund in its recent report on global economic prospects, explaining that this scenario reflects increasing pressures resulting from geopolitical tensions, especially in the Middle East, in addition to potential repercussions on energy prices.
According to this scenario, global economic growth may decline to about 2.5% during the current year, compared to more optimistic estimates of 3.1% if conditions improve quickly, while growth recorded 3.4% in 2025 according to previous expectations. The most negative scenario assumes that oil prices continue to rise around $100 per barrel, with tightening financial conditions and rising inflation expectations.
The spokeswoman stressed that the rise in energy prices has indeed led to an increase in inflation expectations in the short term, but inflation expectations in the medium term remain relatively stable, noting that global financial conditions remain generally “accommodative.”
She also explained that the Fund continues to explore the possibilities of providing financial support to countries affected by the rise in energy and basic commodity prices, without revealing details or names of specific countries, or commenting on reports indicating possible requests for assistance.
The Director of the International Monetary Fund, Kristalina Georgieva, had previously indicated expectations that a number of countries would submit financing requests worth between 20 and 50 billion dollars, while the Fund stressed the need to avoid broad fuel subsidy policies because of their negative effects on public finances and increased demand for energy.
