(13 Jun 2025, 14:37)

Economic Buzz: IMF recommends multi-pronged policy response from emerging markets amid escalation in global trade tension

International Monetary Fund or IMF stated in a latest update yesterday that in its World Economic Outlook, it had projected growth in emerging and developing countries to slow from 4.3 percent in 2024 to 3.7 percent in 2025 amid recent escalation in global trade tension. The fund also initiated significant downgrades for countries most affected by the trade measures. IMF now says that since then that there have been some positive surprises to growth in the first quarter for this group of countries, including China. The fund recommends a multi-pronged policy response for the emerging markets in this scenario. It advises them to first carefully calibrate monetary policy and also macroprudential or prudential policies to maintain stability in countries. Second is rebuilding fiscal buffers to restore policy space to respond to, of course, future shocks that may occur. For countries that may face particular disruptive pressures in the foreign currency, foreign exchange market, fund says that they could pursue targeted interventions if those instances are disruptive. IMF now also encouraging again all of its member countries to undertake the necessary reforms to no longer delay reforms associated with boosting productivity and longer-term growth.

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Economic Buzz: IMF recommends multi-pronged policy response from emerging markets amid escalation in global trade tension