IMF Ups Global Growth Forecasts Amid Trade Tensions
The IMF has raised its global growth forecasts for 2025 and 2026 due to unexpectedly strong purchases and lowered U.S. tariff rates. However, risks like geopolitical tensions and potential tariff rebounds loom. The IMF warns of ongoing economic challenges despite these positive adjustments.
The International Monetary Fund (IMF) has slightly boosted its global growth forecasts for 2025 and 2026, attributing this to stronger-than-anticipated purchases ahead of an August 1 jump in U.S. tariffs and a reduction in the effective U.S. tariff rate to 17.3% from 24.4%.
Despite these improved projections, the IMF cautioned that the global economy still faces significant risks, such as potential tariff rebounds, geopolitical tensions, and enlarged fiscal deficits that could elevate interest rates and tighten financial conditions globally.
IMF Chief Economist Pierre-Olivier Gourinchas highlighted that economic pains remain due to existing tariffs, warned about high tariff impacts, and mentioned uncertainties surrounding recent U.S. trade deals with the EU and Japan.
(With inputs from agencies.)
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