IMF nudges up 2025 growth forecast but says tariff risks still dog outlook
Summary
The International Monetary Fund (IMF) slightly increased its global growth forecasts for 2025 and 2026 due to strong early purchases before an increase in U.S. tariffs, with the U.S. tariff rate now lower than before. However, the IMF warned of risks like rising tariffs again, geopolitical tensions, and larger debts that could increase interest rates. Global inflation should decrease but remain higher than target levels in the U.S.Key Facts
- The IMF raised its global growth forecast by 0.2% for 2025 and 0.1% for 2026.
- Current growth forecasts are below past projections and historical averages.
- Global headline inflation is expected to lower to 4.2% in 2025 and 3.6% in 2026.
- The U.S. effective tariff rate has dropped to 17.3%, down from 24.4% in April.
- Additional U.S. tariffs are planned on goods like automobiles and metals.
- Future tariff increases could further raise effective tariff rates and impact trade.
- Recent tariff agreements with the EU and Japan were not included in the current forecast.
- The IMF noted that temporary business stockpiling boosted short-term growth but won't last long-term.
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