IMF’s Georgieva Urges Central Banks to Remain Vigilant Amid Inflation and Market Uncertainty
Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has urged central banks to maintain policy agility in the face of persistent inflationary pressures and evolving global trade dynamics, as the IMF and World Bank Spring Meetings commence in Washington.
Speaking ahead of the week-long meetings, Ms Georgieva warned that monetary authorities must remain attentive to inflation expectations, data trends, and financial system vulnerabilities—particularly as risks rise among nonbank financial institutions.
“To protect price stability, monetary policy must remain agile and credible, supported by a strong commitment to central bank independence,” Ms Georgieva said, emphasising the continued need for robust financial regulation and supervision.
Her comments come as a resurgent US trade policy under President Donald Trump—including steep reciprocal tariffs—adds volatility to the global economic landscape. The IMF chief acknowledged the broader economic implications of the trade tensions, though stopped short of addressing the US moves directly.
Exchange Rate Flexibility, Fiscal Constraints
Turning to emerging and developing economies, Ms Georgieva advised policymakers to preserve exchange rate flexibility as a “shock absorber,” while looking to the IMF’s Integrated Policy Framework for guidance on when temporary measures may be warranted to ensure macroeconomic stability.
She also highlighted the difficult fiscal choices ahead, particularly for low-income countries grappling with weak domestic revenues and constrained financing conditions.
“Tighter budget constraints will entail difficult choices everywhere, but nowhere more so than in low-income countries,” Ms Georgieva noted, calling for international partners to increase both financial assistance and support for institutional capacity building.
Debt Sustainability and Restructuring
With public debt burdens mounting in several countries, Ms Georgieva urged governments to act pre-emptively to restore debt sustainability. In some cases, this could require initiating formal debt restructuring processes.
“I am very pleased to mention that the Global Sovereign Debt Roundtable will soon publish a playbook for country authorities considering debt restructuring—to help decision-making,” she revealed.
Growth Through Reform
In remarks touching on global growth disparities, Ms Georgieva pointed to the United States as a standout performer in productivity gains and urged lagging economies to pursue structural reforms.
“Ambitious reforms in banking, capital markets, competition policy, intellectual property rights, and AI preparedness can contribute to higher growth,” she said, adding that governments must remove barriers to private enterprise and innovation to eliminate “self-inflicted injuries.”
IMF Support and Reform Agenda
Ms Georgieva reiterated the Fund’s commitment to helping member states navigate macroeconomic adjustments and implement reforms. Currently, 48 countries—including Argentina—are receiving IMF balance of payments support.
She also called on countries to prioritise correcting both internal and external macroeconomic imbalances as they chart paths to more resilient and sustainable growth.
