Trade War Tougher Than COVID For Emerging Market Central Banks: IMF

The trade war's impact is more challenging for emerging market central banks than the COVID-19 pandemic was, said Gita Gopinath, the International Monetary Fund’s (IMF) First Deputy Managing Director, in an interview with the Financial Times, Reuters reported via Gursimran Kaur.

The IMF has already lowered its forecast for global economic growth.

During the pandemic, central banks in developing economies were able to respond quickly by easing monetary policy.

But the current wave of tariff-driven uncertainty, triggered by U.S. President Donald Trump’s unpredictable trade moves, is proving more complex to navigate.

“This time, the challenge is going to be greater for them compared to the pandemic,” Gopinath said.

The IMF has already lowered its forecast for global economic growth, citing the negative effects of higher tariffs and the uncertainty surrounding the U.S.’s shifting trade policies.