The International Monetary Fund, or IMF, has expressed concern over escalating trade tensions sparked by new U.S. tariffs but emphasized that a global recession is not on the horizon.

The organization acknowledged a sharp rise in economic uncertainty, particularly in relation to trade policy, yet maintained a cautiously optimistic outlook for global growth, BBC reports.

While financial markets have faltered and geopolitical trust has deteriorated, the IMF stated that its revised projections reflect a slowdown--but not a full-blown recession.

Global equity markets have taken a hit since U.S. President Donald Trump introduced sweeping tariffs on April 2, an event dubbed “Liberation Day” by the White House.

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Major indexes remain down, with investor sentiment shaken by fears of retaliatory trade measures and sluggish global investment.

The World Trade Organization (WTO) has predicted a contraction in international trade volumes this year, directly linking the outlook to Washington’s tariff strategy, BBC adds.

Kristalina Georgieva, managing director of the IMF, urged nations to use the moment as an opportunity for structural reform.

BBC quotes Georgieva saying, “A better balanced, more resilient world economy is within reach.”

“We must act to secure it,” she said.

Georgieva called on the U.S. to address its fiscal deficit, encouraged China to bolster social safety nets, and pressed Europe to eliminate internal trade barriers in services and deepen its economic integration.

Despite lingering fears of a downturn, the IMF’s current stance offers reassurance that the global economy can weather the turbulence--provided governments act decisively.

The organization emphasized collective responsibility and policy coordination as the path to renewed growth and stability.

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