Emerging economies to meet in Saudi Arabia as Trump tariffs create trade uncertainty

Central bankers and finance ministers from emerging market economies are set to descend on AlUla in Saudi Arabia this weekend to hold discussions on regional and global macroeconomic developments, as US President Donald Trump's tariffs bring a heightened degree of uncertainty to global trade.

The Conference for Emerging Market Economies, jointly organised by the International Monetary Fund and the Saudi Ministry of Finance, will run from February 16 to 17 with panels on subjects including policy challenges, fiscal consolidation and debt restriction, resistance in the financial system and dealing with trade tension.

IMF managing director Kristalina Georgieva and Saudi Finance Minister Mohammed Al Jadaan are expected to deliver opening and closing remarks at the Maraya event venue.

The event will be the third that Ms Georgieva has attended in the Middle East in recent weeks, after speaking at the Arab Fiscal Forum and the World Governments Summit in Dubai.

Ms Georgieva used the event in Dubai to deliver a message she has repeated in recent months: that the world's medium-term outlook faces a period of low growth and high debt.

Latest IMF data projects growth in the Middle East and North Africa to rise by 3.6 per cent this year but, like much of the rest of the world economy, the region faces dimmer medium-term prospects. Global public debt is expected to reach 100 per cent of gross domestic product by 2030.

“Many countries in this region face similar pressures, with debt levels exceeding 70 per cent of GDP,” Ms Georgieva said at the Ninth Arab Fiscal Forum. “This poses the risk of them becoming trapped in a low-growth, high-debt scenario.”

This comes as the second Trump administration casts a high degree of uncertainty on the global outlook, most notably on trade. The US President has announced a series of tariffs, which he has threatened to impose on trading partners in North America and beyond in exchange for domestic concessions.

Mr Trump most recently announced reciprocal tariffs on partners in response to what he called unfair trade practices. "We're going to be doing reciprocal tariffs, which is whatever they charge, we charge, very simply,” he said on Wednesday.

Some emerging market economies remain exposed to the proposed idea of reciprocal tariffs such as Brazil, but perhaps none more so than India, whose Prime Minister, Narendra Modi, met Mr Trump on Thursday.

The US is India's largest trading partner, while India ranks tenth for the US. In fiscal year 2024, Indian exports were reported at $77.5 billion, while US exports to India were $40.7 billion, according to the India Brand Equity Foundation.

India recently cut some duties in a bid to appease Mr Trump, including reducing its peak import tariff from 150 per cent to 70 per cent. Speaking from the White House on Thursday, Mr Trump said he and Mr Modi had agreed to hold negotiations to "address the long running disparities" between the two countries.

"We want a certain level playing field, which we really think we're entitled to," Mr Trump said.

Mr Al Jadaan and Ms Georgieva have warned about the rise in protectionism, and the IMF head has urged countries in the Middle East to find more agile solutions to increase their economies, with trade not being the viable solution to economic growth that it was.

“This region faces the pressing need to create jobs, enhance social safety nets, build resilience to more frequent natural disasters and support economic diversification,” she said.

With trade patterns shifting, Ms Georgieva previously noted how countries in the Gulf Co-operation Council are deepening regional co-ordination.

A group of finance ministers from the GCC highlighted during the IMF annual meeting in Washington in October some of the areas of regional integration the group has undertaken. Areas of integration included infrastructure, electric connectivity and the establishment of the regional rail network.

One major focus of growth for the IMF is to increase productivity. One way to unlock this is digitalisation, Ms Georgieva said last week, pointing out that countries in the Mena region who embraced this have far higher productivity than those who have not.