By David Lawder and Andrea Shalal

WASHINGTON (Reuters)

The International Monetary Fund (IMF) will remain focused on preventing balance of payments crises while addressing concerns from the Trump administration about core missions.

IMF Managing Director Kristalina Georgieva stated during a press conference at the IMF and World Bank spring meetings that the directives from U.S. Treasury Secretary Scott Bessent would be reviewed with representatives from the 190 member countries.

Georgieva welcomed Bessent’s expression of U.S. support for the IMF. Bessent had called on the IMF and World Bank to refocus on macroeconomic stability and development, arguing that they have diverged into climate change, gender, and inclusion issues, which he believes have diminished their effectiveness.

Bessent’s proposals align with the Trump administration’s efforts to revert policies on climate and gender under the Biden administration and include calls to expand the World Bank’s energy financing to fossil fuels and nuclear power.

Bessent, who holds significant U.S. shares in both institutions, emphasized that Georgieva and World Bank President Ajay Banga must gain the Trump administration’s trust by executing ‘back-to-basics’ policies. Georgieva acknowledged that climate change affects macroeconomic policy in specific contexts, highlighting that the IMF’s role is not to act as climate experts but to develop appropriate policies for member countries facing natural disasters.

Regarding the IMF’s Resilience and Sustainability Trust facility launched in 2022, Georgieva noted that this climate-related lending is a small fraction of the IMF’s overall financing. She pointed out that policies are ultimately determined by member countries.

Georgieva agreed with Bessent regarding the need for cost-efficiency, asserting that the IMF’s budget has remained unchanged in inflation-adjusted terms for 20 years. She stated, “I really like to run a tight ship.”

TARIFF CHALLENGES

However, Georgieva clarified that the IMF’s priority remains addressing macroeconomic stability issues, particularly amidst the highest U.S. tariffs in over a century, which led to a significant downgrade in the IMF’s 2025 growth outlook.

Georgieva insisted that, despite predictions of a possible U.S. recession, the IMF maintains a 37% probability estimate. She noted, “We don’t see the kind of economic activity disruption that would pull U.S. growth below zero.”

Nonetheless, countries are urged to implement fiscal and economic reforms to promote faster growth, streamline regulations, and enhance innovation and productivity. Georgieva called for major trading nations to quickly resolve tariff tensions to alleviate the significant uncertainty impacting investment and consumer spending, encouraging all countries to reduce trade barriers.

She urged China to modify its growth model to encourage consumer spending, suggested the U.S. should decrease fiscal deficits, and called for the EU to complete common market reforms, including unifying its banking and capital markets sectors.