IMF Managing Director: "US Economy Is Clearly Heading for a Soft Landing"

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated on the 2nd (local time) that despite the pain caused by high interest rates, thanks to the Federal Reserve's (Fed) decisive actions, the U.S. economy is clearly heading towards a soft landing.

Kristalina Georgieva, IMF Managing Director
Photo by Yonhap News

Georgieva appeared on CNN that day and said, "It has been painful for small and medium-sized enterprises, but it has achieved the desired effect without pushing the (U.S.) economy into a recession." This comes as inflation and the labor market in the U.S. have both calmed down following the steepest interest rate hikes in over 30 years, leading to growing expectations that the U.S. economy can avoid a severe recession. The market expects the Fed to begin cutting interest rates as early as March.

Regarding former President Donald Trump's election prospects and the possibility of his return to protectionist trade policies, Georgieva said, "Policymakers need to help those who have been hurt by globalization or who risk fostering anger and isolationism." She added, "In this context, we will see a backlash against the integrated global economy that makes all of us wealthier and safer worldwide, including in the U.S. and Europe."

Georgieva also warned about the fractures in the global economy as strategic competition between the U.S. and China intensifies. She pointed out, "If this situation continues, global gross domestic product (GDP) could ultimately decrease by 7%, which is roughly equivalent to the GDP of Germany and France." She emphasized, "Access to critical minerals needed for future green technologies could be blocked," adding, "This could significantly impact the future competitiveness of the rapidly changing global economy."

Therefore, Georgieva urged the U.S. and China to compete rationally while cooperating on globally important issues.

This content was produced with the assistance of AI translation services.