Mission: Impossible? The chancellor goes to the IMF with a very big challenge – and she is not alone | Money news Aitrend

There will be a lot to chew during the spring meetings of the International Monetary Fund (IMF) this week.

Central bankers and finance ministers descend to Washington for its latest bi-year gathering, a place where politicians and academics converge, all trying to give meaning to what is happening in the world economy.

Everything and nothing has changed since their last meeting in October – a man continues to dominate the agenda.

Six months ago, the delegates wondered if Donald Trump Could win the elections and what it could mean for taxes and prices: how far does it push it? Did his policy correspond to his rhetoric?

This time, are you waiting for iterations of the same questions: will the American president risk plunging the greatest economy in the world in recession?

Yes, he had an explosive display on his so-called “Liberation Day”, but will he now row? Have the markets actually verified it?

Behind the scenes, finance ministers around the world will practice their powers of persuasion, each jostling for meetings with their American counterparts to negotiate a reduction in Trump price.

This includes Chancellor Rachel Reeves, who is still waiting for a trade agreement with the United States – although she is not alone.

Find out more:
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Are we heading for a recession?

IMF economists have already made their decision on the potential for Trump’s damage.

Last week, they warned against growing financial risks after a period of turbulence in the financial markets, induced by Trump’s decision to repel American protectionism at its highest level in a century.

In the middle of this week, the organization will publish its global economic prospects, in which it will retrograde global growth but will not stop to predict a full -fledged recession.

Others are less optimistic.

Kristalina Georgieva, CEO of the IMF, said last week: “Our new growth projections will include notable brands, but not the recession. We will also see increases in inflation forecasts for certain countries. ”

She recognized that the world was undergoing a “restart of the global trade system”, comparing trade tensions to “a pot that bubbed for a long time and which was bubbling now”.

She continued: “To a large extent, what we see is the result of an erosion of confidence – confidence in the international system and confidence between countries.”

Do not prick the bear

It was a carefully calibrated response. Georgieva did not blame the door of the United States and stopped sheltered from the Trump administration to stop or water his aggressive prices policy.

It could have been a choice. To the frustration of past and present politicians, the IMF generally does not hesitate to make its opinions known.

Last year, he warned Jeremy Hunt against tax reduction, and in 2022, he openly criticized the plans of the government of Liz Truss, tax reductions to alter inflation and inequalities.

Adopt such a frank approach with Trump invites risks. Its administration already assesses the opportunity to withdraw from the global institutions, including the IMF and the World Bank.

The United States is the largest shareholder of the two, and its departure could be devastating for two organizations which have been pillars of the world economic order since the end of the Second World War.

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Here, in the United Kingdom, Andrew Bailey has already raised concerns about the prospect of global fragmentation.

It is “very important that we have no fragmentation of the global economy,” said the governor of the Bank of England.

“Much of this is that we have support and commitment to multilateral institutions, institutions such as the IMF, the World Bank, which support the functioning of the global economy. It’s really important. “

The Trump administration could have a different point of view when its examination of intergovernmental organizations is over.

This is the main tension that takes place in this year’s spring meetings.

How much the IMF will say and how much we will have to read between the lines, remains to be seen.