IMF's Georgieva Says Markets Need to Be More Cautious

• IMF downgraded global growth forecast, citing the Middle East war and infrastructure destruction as key uncertainties, with a scenario where the world economy 'skims recession'.
• Georgieva believes markets are overly optimistic, especially outside the robust US economy, and should be more cautious given significant supply chain disruptions and the slow-moving nature of global economic recovery.
• She advises central banks to calibrate policies carefully, avoiding rapid tightening that could stifle growth, and emphasizes the importance of fiscal buffers and long-term inflation expectations remaining well-anchored.

The IMF has downgraded its global growth forecast, with Managing Director Kristalina Georgieva highlighting the Middle East war and infrastructure destruction as key uncertainties. She warns that markets are overly optimistic, particularly outside the robust US economy, and advises caution due to ongoing supply chain disruptions and the risk of central banks over-tightening.