Trade tensions, debt warnings, and a call for unity: The 2025 World Bank-IMF Spring Meetings

The 2025 Spring Meetings of the International Monetary Fund (IMF) and the World Bank in Washington, D.C., were marked by a sombre tone this year, reflecting the global economy's multifaceted challenges.​

A significant point of contention was the recent surge of US tariffs under President Donald Trump's administration. These protectionist measures have disrupted global trade, and are projected to increase costs for businesses and consumers alike. IMF Managing Director Kristalina Georgieva emphasized the urgency of resolving related trade disputes, stating, "Uncertainty is really bad for business. So, the sooner there is this cloud that is hanging over our heads is lifted, the better for prospects for growth." ​

The IMF downgraded its global growth forecast for 2025 to 2.8%, from 3.3% in January. It cited the adverse effects of escalating trade tensions and policy uncertainty. It also reduced its US growth projection to 1.8% from 2.7%, with much of the anticipated slowdown attributed to tariff impacts. ​

Financial stability risks have also increased. The IMF warned of heightened vulnerabilities due to sharp asset repricing and high leverage among non-bank institutions. Emerging economies are seen as particularly at risk from rising borrowing costs and potential capital outflows.​

Debt sustainability was another central concern. Global public debt is projected to near 100% of global GDP by the end of this decade. The IMF highlighted the need for proactive debt restructuring and fiscal reforms to ensure long-term sustainability.​

World Bank President Ajay Banga underscored the importance of job creation, especially in developing countries where a significant youth population is entering the workforce. He emphasized a "jobs-focused strategy" as central to the World Bank's mission, stating that development must lead to opportunity. ​

Initiatives like "Mission 300," aimed at connecting 300 million Africans to electricity by 2030, were highlighted as critical for fostering economic development and employment opportunities. Banga noted progress in expediting project approvals, which has reduced the average time from 19 months to 14 months, with a target of reaching 12 months by the end of January. ​

The role of international financial institutions in addressing climate change was also debated. While US Treasury Secretary Scott Bessent called for the IMF and World Bank to refocus on their core economic mandates, Georgieva defended the inclusion of climate-related issues. She emphasized their macroeconomic implications, especially for vulnerable nations, and stated that the IMF would stay "laser-focused" on preventing balance-of-payments crises while supporting countries affected by climate change. ​

As the meetings drew towards a close, there was a consensus on the need for multilateral cooperation to navigate the complex challenges ahead. The discussions underscored the interconnectedness of trade, debt, and development issues, and the importance of coordinated policy responses for fostering a more resilient and inclusive global economy.