Macro Risk: IMF Warnings on Growth and Trade Tensions
Published on Wednesday, April 30, 2025
In April, the IMF’s World Economic Outlook highlighted downside risks, especially from escalating tariffs and potential tightening of financial conditions if markets abruptly reassess growth.
For companies, this means higher risk premiums, narrower issuance windows, and compressed valuations. Simultaneously, a U.S. executive order institutionalized “reciprocal tariffs,” signaling a more interventionist and volatile regime.
Finance teams should revise assumptions for rates, imported inflation, and FX; stress test capex plans under mild recession scenarios; and enforce stronger cash discipline (DSO/DPO, hedging). Strategically, this environment favors multi-region supplier portfolios, flexible capacity, and modular contracts (indexation, price pass-throughs). M&A teams face greater closing risks (FDI screening, antitrust reviews) and should expect more earn-out structures. Investor communications must highlight governance of macro and trade risks to maintain confidence under cautious guidance.
Depending on its business sector and the nature of its activities, your organization may be impacted, directly or indirectly, by this global risk over the coming years.
Whether you are a director, an executive or a manager, you may be wondering if your company is exposed to this global risk or other potential events. And if so, are you and your organization ready to face these challenges?
Should you need advice on the appropriate risk governance and enterprise risk management approach for your organization, please contact us.
Baldwin Global is an independent advisory group offering professional services, education and training in risk governance and enterprise risk management. We help our clients’ boards of directors and management teams attain their objectives by embedding sound risk oversight and management practices into their decision-making process to have a significant positive impact on their business.