The global economy could contract by as little as 0.3 percent or as much as 2.3 percent over the next seven to ten years, according to a report summarized by Vedomosti from the International Monetary Fund. This assessment is tied to an IMF study titled Disintegration in Global Trade: Accounting for Commodities, which examines how shifts in trade patterns and commodity flows might reshape growth trajectories worldwide.
The path ahead is likely to feature a fragmentation of the world economy into distinct blocs, with the severity of the split shaping outcomes for growth and resilience. The IMF warns that the most vulnerable economies could face double digit declines in GDP if policy responses and diversification efforts stall. This potential bifurcation underscores the need for policy tools that strengthen trade resilience, reduce exposure to single markets, and foster diversified supply chains.
In the early hours of March 30, IMF Managing Director Kristalina Georgieva highlighted that the year ahead could present significant headwinds for global activity. Her assessment reflects ongoing concerns about demand softness, financial conditions, and the transmission of shocks across regions and sectors.
Georgieva also emphasized that globalization has contributed to uneven wealth distribution across the world. The IMF argues for a more robust approach to trade that cushions communities from shocks and expands access to opportunity. A key recommendation is to diversify supply chains and ensure they remain secure under a broader set of geopolitical and economic scenarios, reducing the risk of concentrated dependencies.
Recent IMF communications suggest that a considerable portion of global growth in the near term will hinge on dynamic economies such as China, which is projected to contribute a meaningful share of growth even as the broader landscape evolves. This underscores the importance of maintaining open channels for trade, investment, and technology transfer while strengthening domestic capabilities in other regions to support steadier, more inclusive expansion.