Archive · 6 Jun 2025
IMF: Trade Wars Pose a Greater Threat Than COVID for Banks
The IMF says trade wars are a bigger problem for countries with developing economies than the COVID pandemic.
Gita Gopinath, from the IMF, explained that it's harder for central banks in these countries to deal with trade wars because their effects are unpredictable.
During the pandemic, central banks could easily lower interest rates.
But with trade wars, the IMF believes that central bankers face a greater challenge.
This is because trade wars cause changes in the prices of goods, making it difficult for these banks to make the right decisions to help their economies.
The situation is more complex than during COVID-19.
IMF states that trade wars pose a tougher challenge to emerging market central banks compared to the COVID-19 pandemic.
Gita Gopinath, IMF's First Deputy Managing Director, made the statement in an interview.
The unpredictable impact of tariffs and trade wars complicates decision-making for central bankers.
During the pandemic, central banks could ease monetary policy; the trade war poses a different challenge.
The interview was with the Financial Times.
- Who
- Gita Gopinath, First Deputy Managing Director of the IMF.
- What
- The IMF says trade wars are a tougher threat for emerging market central banks than COVID-19.
- When
- June 6, 2025.
- Where
- N/A
- Why
- Because the impacts of trade wars are unpredictable, making it harder for central banks to respond.
- Source
- Reuters
- Key Figure
- Gita Gopinath, IMF's First Deputy Managing Director
- Subject
- Impact of Trade War on Emerging Market Central Banks
- Publication Date
- June 6, 2025