Globalization isn’t dead, just ‘transformed,’ says IMF chief economist

What the IMF is actually seeing

Gourinchas pointed to solid global trade-to-GDP ratios as evidence against de-globalization. The shift, in his assessment, is concentrated: a US-led effort to reduce bilateral trade exposure with China, accompanied by retaliatory measures from major partners. "Other actors have stepped in," he said, naming Mexico and Vietnam among "connector countries" absorbing redirected supply chain activity.

The framing is significant because it separates rhetorical positioning from measurable flows. US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer have publicly argued globalization extended integration beyond sustainable limits; the IMF's reading is that supply chains have adapted rather than contracted. The July 8 WEO update will test whether that institutional view survives a possible downward revision tied to the economic fallout of the US-Israeli war on Iran.

What it means for Bangladesh

Bangladesh sits in a structurally exposed position. Its export base is concentrated in readymade garments directed largely at US and EU buyers — both of which are recalibrating sourcing strategies under tariff pressure. Gourinchas's "connector country" taxonomy raises a question Dhaka has not yet answered at scale: whether Bangladesh can absorb relocated orders from China, or whether it competes directly with Vietnam and Mexico for that role.

The chief economist also flagged a constraint that cuts deeper. New manufacturing capacity in advanced economies, he noted, is expected to rely heavily on automation and employ fewer workers. For emerging markets whose growth has rested on labor-intensive exports, that implies a narrowing pathway: compete on cost and scale in segments that reshoring economics still do not favor, or move up the value chain before the window closes.

World Bank Chief Economist Indermit Gill has characterized the past decade as a "lost decade" for many developing economies, and Gourinchas acknowledged resilience through successive shocks — pandemic, the Ukraine invasion, tariff disruption — but cautioned that resilience is "not infinite."

What to track

The July 8 WEO update will formalize the IMF's revised growth estimates and indicate whether the institution treats fragmentation as cyclical or structural. For Bangladesh, the operative indicators are bilateral tariff trajectories with the US and EU, order book shifts from Chinese factories, and domestic progress on backward linkage in textiles. The connector-country designation is available. Whether Bangladesh secures it depends on execution capacity, not narrative positioning.