ISTANBUL 

International Monetary Fund (IMF) Managing Director Kristalina Georgieva stressed Thursday that uncertainty is very costly and called for a quick resolution of tensions and compromise on trade policies.

Speaking at a press conference on the IMF's 2025 global policy agenda, Georgieva said “major trade policy shifts have spiked uncertainty off the charts, accompanied by tighter financial conditions and high market volatility."

She pointed out that the world economy is facing a new and big test with its depleted buffers, which puts countries in a difficult situation.

"Countries need to work constructively to resolve trade tensions as swiftly as possible, preserving openness and removing uncertainty. A trade policy settlement among the main players is essential."

Georgieva said that in an environment of uncertainty, companies are not investing and households are saving instead of spending, further dampening already weak growth prospects.

Emphasizing that countries also need to address the imbalances that fuel many of the tensions between major economies, she said: “Some countries, like China, need to act to boost private consumption and embrace the shift to services. Others, like the US, need to reduce their fiscal deficits.”

Georgieva said that all countries should reduce both tariff and non-tariff trade barriers.

She also said that countries should take action to maintain economic and financial stability, pointing to the importance of growth-oriented reforms to increase productivity.

Pointing to US Treasury Secretary Scott Bessent's call for the IMF and the World Bank to refocus on their core missions, Georgieva said they highly value the voice of the US, that there is a road ahead and that they are focused on this issue.