IMF Raises Global Growth Forecast to 3.0% Amid Tariff Adjustments
The International Monetary Fund (IMF) announced an updated forecast on Tuesday, projecting global economic growth at 3.0 percent for the current year. this represents an upward revision from the 2.8 percent growth predicted in April.
A meaningful contributor to this improved outlook is the reduction of several tariffs by U.S. President Donald trump, which were initially announced in early April. The pausing of various tariff rates and a de-escalation of the U.S.-China trade conflict are noted as positive developments.
“Despite these welcome developments, the tariff rates are still historically high,” stated IMF Chief Economist Pierre-Olivier Gourinchas.
Factors Bolstering Growth Projections
Beyond tariff adjustments, several other factors have influenced the IMF’s upgraded growth estimate. Anticipation of increased U.S. customs duties had previously prompted U.S. companies and consumers to accelerate purchases of foreign goods. This surge in demand boosted exports to the United States, thereby strengthening economic activity in Asia and Europe, according to the IMF.
Furthermore,the IMF highlighted a global decline in inflation. Concurrently, the weakening of the U.S. dollar since January has amplified the impact of U.S. customs policies on the competitiveness of other nations.
For the current year, the IMF forecasts growth of 1.9 percent in the U.S. and 1.0 percent in the Eurozone. The projected U.S. growth rate marks a notable decrease from the 2.8 percent expansion recorded last year.
Looking ahead, the IMF anticipates global economic growth to reach 3.1 percent next year.
