International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned Wednesday that global economic uncertainty will continue to be "the new normal."

The global economy is "better than feared, but worse than we need," Georgieva said at the Milken Institute in Washington, D.C. "Global resilience has not yet been fully tested. And there are worrying signs the test may come."

Georgieva said that the trend of tariff policies is becoming a key variable affecting the prospects of the world economy. The full effect of tariffs "is still to unfold," she said.

Meanwhile, the flood of goods previously destined for the U.S. market but redirected to markets in other countries may trigger a "second round of tariff hikes," she warned.

Financial markets generally remain stable in the face of "masking" policy turmoil, Georgieva warned, adding that "if a sharp correction were to occur, tighter financial conditions could drag down world growth."

Georgieva urged the world's policymakers to preserve trade as an engine of global growth. "Let's pull together in this complex world to deliver smart policies that build strong markets, institutions, and safety nets," she said.

IMF revised the global GDP growth of 2025 down to 3 percent in its July update of World Economic Outlook from its previous projection of 3.3 percent in 2024. It will update the projections at its 2025 annual meetings in Washington, D.C. on Oct. 13-18.