THE International Monetary Fund (IMF) will stay "laser focused" on preventing balance of payments crises and incorporate the Trump administration's concerns into its policies but will keep supporting countries affected by climate change, IMF Managing Director Kristalina Georgieva said on Thursday.
Reuters cited Georgieva saying this in a press conference during the IMF and World Bank spring meetings that the directives from U.S. Treasury Secretary Scott Bessent would be discussed with representatives of the multilateral crisis lender's 190 members.
She also said she welcomed Bessent's expression of U.S. support for the IMF.
Bessent on Wednesday called for the IMF and the World Bank to refocus on their core missions of macroeconomic stability and development, saying they had strayed too far into issues such as climate change, gender and inclusion that have reduced their effectiveness.
The U.S. Treasury chief's prescriptions were in line with the Trump administration's efforts to reverse the Biden administration's policies on climate and gender issues and also included a call for a broadening of the World Bank's energy lending to fossil fuels and nuclear power.
Bessent, who controls the dominant U.S. shareholding in both institutions, also said Georgieva and World Bank President Ajay Banga needed to earn the Trump administration's trust by implementing "back-to-basics" policies.
Georgieva said climate change impacts macroeconomic policy in some cases.
"People think that we have climate experts. We don't. That's not our job," she said of the IMF. "Our job is to say, 'Okay, if you are Dominica and a hurricane can wipe out the equivalent of 200% of your GDP, what are reasonable policies put in place?'"
Asked whether the IMF would rethink the Resilience and Sustainability Trust financing facility that it launched in 2022 to help countries deal with climate change, pandemics and other chronic challenges, Georgieva said this lending was a "really small" portion of the IMF's total financing.
In the Kenyan village of Kamathatha, farmer-turned-seed advocate Martha Njenga is teaching fellow villagers traditional seed preservation methods – empowering them to save and replant seeds season after season.
The IMF also is a membership organization, and its members ultimately will decide its policies, she added.
She said she agreed with Bessent's call for the two Bretton Woods institutions to be cost-efficient, saying that in real, inflation-adjusted terms, the IMF's budget had not changed in 20 years, adding: "I really like to run a tight ship."
Tariff Challenges
But Georgieva made clear that the IMF's top priority is the daunting macroeconomic stability challenge posed by the highest U.S. tariffs in more than a century, which prompted the IMF to slash its 2025 growth outlook earlier this week.
"Simply put, the world economy is facing a new and major test and it faces it with policy buffers depleted by the shocks of recent years."
Although many private-sector economists are predicting higher chances of a U.S. recession, opens new tab, Georgieva insisted that the IMF's view of a 37% probability was accurate.
"We don't see either in the labor market or in indicators for the functioning of the economy, such a dramatic block of economic activities that would drag growth in the United States all the way to below zero," she said.
Still, the IMF chief said countries needed to respond to the trade challenge by pursuing fiscal and economic reforms aimed at faster growth, including streamlining regulation and fostering innovation and productivity gains.
She called on the major trading countries to resolve tariff tensions swiftly to ease "off-the-charts" uncertainty that is paralyzing investment and consumer spending.
"All countries should seize this moment to lower their trade barriers, both tariff and non-tariff," Georgieva said.
She called on China to shift its growth model to more consumer spending, urged the U.S. to reduce its fiscal deficits and said the European Union should complete its common market reforms, including unifying its banking and capital markets sectors. - April 25, 2025
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