IMF chief says countries opting not to retaliate against US tariffs helps global economy

WASHINGTON, Oct 14 (Reuters) - The decision by most countries to not retaliate against the United States' trade policy has helped bolster the resilience of the global economy in the face of tariff shocks and financial conditions, the International Monetary Fund chief said on Tuesday.

"The world, so far, and I cannot stress enough so far, has opted not to retaliate and to continue to trade pretty much on the rules that have existed," Kristalina Georgieva said during a speech at the annual meeting of the IMF and World Bank.

Earlier on Tuesday, the fund had edged up its 2025 global growth forecast in its global economic outlook but also warned that a renewed U.S.-China trade war threatened by President Donald Trump could slow output significantly.

However, the resilience could also be tested by the stretched valuations in global markets - especially the tech sector, which have fuelled a stellar market rally this year.

"This is a bet, very big bet," she said. "If it pays back, fantastic, then our problem with low growth is gone, because we will see increase in productivity and we will see an increase in growth. What if it is either slow to come true or doesn't quite materialize. What then?"