Global Economy News
LAST UPDATE: June 5, 2025
Trade war a bigger challenge for emerging market central banks than Covid, says IMF’s Gita Gopinath
IMF’s Gita Gopinath stated that the ongoing trade war poses a more significant challenge to emerging market central banks than the COVID-19 pandemic did.
Insight
The trade war introduces complex challenges for emerging markets, including inflationary pressures and currency volatility. Unlike the pandemic, which saw coordinated global monetary responses, the trade war’s unpredictable nature complicates policy-making. Emerging market central banks must navigate these uncertainties while maintaining economic stability. Gopinath’s remarks emphasize the need for adaptive monetary policies and international cooperation to mitigate the trade war’s adverse effects.
Pentagon chief confident NATO will commit to Trump’s defence spending target
U.S. Defense Secretary Pete Hegseth expressed confidence that NATO allies will agree to former President Donald Trump’s demand to increase defense spending to 5% of GDP ahead of the NATO summit scheduled for June 24-25 in The Hague.
Insight
The push for increased defense spending reflects heightened concerns over Russian aggression and the need for NATO to enhance its military readiness. While the current target is 2% of GDP, the proposed increase to 5% signifies a substantial shift in defense priorities. NATO Secretary-General Mark Rutte’s proposal to allocate 3.5% for defense and an additional 1.5% for broader security-related expenses indicates a comprehensive approach to security. However, member states are divided on the timeline, with some advocating for a 2030 target, while others, like Rutte, suggest 2032. The final agreement is expected to be negotiated up to the summit’s start.
