Outgoing IMF chief economist warns global economy has fewer buffers against shocks

Pierre-Olivier Gourinchas, the International Monetary Fund's outgoing chief economist, warned on Friday that the global economy is losing its capacity to absorb future shocks, citing depleted oil reserves, shifting trade relationships driven by U.S. tariffs, and persistent uncertainty that has made forecasting unusually difficult.

Dollar Dominance Endures Amid Trade Upheaval

In an interview with Reuters ↘ 0.90% before leaving the IMF to return to the University of California, Berkeley, Gourinchas said trade flows are clearly being reshaped by President Donald Trump's unilateral tariffs on most countries — but stressed that the U.S. dollar remains the anchor of international trade, banking, and central bank reserves.wtvbam+1

"We are seeing very, very little in terms of movements that would indicate that we're moving away from a dollar-centered world. We are very firmly in the dollar-centered world," he said. At the same time, he argued that globalization is not dead but is being "transformed," with emerging economies showing resilience through greater supply-side adaptability.barrons+1

Gourinchas pointed to the European Union's completion of trade agreements with Latin America and India as evidence that countries are deepening ties outside the United States in response to tariff pressure. He cautioned that tariffs and economic sanctions often lose effectiveness over time as targeted nations adapt by finding new routes and building alternative partnerships.nationthailand

Fewer Shock Absorbers Available

The departing economist warned that strategic petroleum reserves, which helped limit the oil-price impact of the Middle East conflict earlier in 2026, are now "fairly depleted," leaving countries with less room to maneuver if energy supplies are disrupted again. Only about 3 percent of global oil supply was ultimately removed from the market during the conflict, compared with initial estimates of 10 to 15 percent, thanks in part to reserve releases and refinery adjustments.nationthailand

Gourinchas acknowledged that the IMF had faced little historical precedent in 2025 and 2026 for building credible baseline forecasts, forcing economists to work with ranges of possible outcomes rather than relying on a single central projection. The Fund is due to release a new global forecast on July 8.nationthailand

A Legacy Shaped by Crises

Gourinchas's departure, effective July 1, ends a four-year tenure marked by overlapping crises — from post-pandemic inflation to trade wars and armed conflict. His final public message framed the challenge ahead not as imminent collapse but as a world that is harder to predict and harder to stabilize, where resilience matters as much as growth.news.bloomberglaw+2