Australia’s economic growth forecasts have been revised upwards by the International Monetary Fund (IMF), despite ongoing uncertainty around Donald Trump’s tariffs. 

Since April, the agency has upgraded Australia’s projected GDP growth, from 1.6 to 1.8 per cent, in 2025, and from 2.1 to 2.2 per cent, in 2026.

Australia’s result mirrored the IMF’s expectations for the global economy, which were also revised up for this year and next year.

But it was still warning of a slowdown in global growth compared to the last several years.

“Overall, risks to the outlook remain tilted to the downside,” the IMF’s report warned.

Donald Trump stands looking down with a frown. Behind him large US flags hang behind pillars at the White House.

US President Donald Trump is threatening higher trade tariffs against economies which do not strike deals with his administration by August 1. (Getty Images: Jim Lo Scalo/EPA/Bloomberg )

Among the biggest boosts to this forecast, and largest unknowns in the future, was Donald Trump’s trade tariffs, as US firms sought to bring forward imports to beat the president’s August 1 deadline.

Several major economies, including the European Union, the United Kingdom and Japan have struck deals with the Trump administration in recent weeks to avoid paying higher duties.

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“The US effective tariff rate underlying the projections is 17.3 per cent, compared with 24.4 per cent in the April reference forecast,” the report said.

The April forecast was made not long after Mr Trump unveiled his “liberation day” tariffs which applied heavy tariffs on some of America’s biggest trading partners, and a 10 per cent “baseline” tariff on most other economies, including Australia.

Earlier this week, Mr Trump floated raising that baseline rate from 10 per cent to somewhere between 15 and 20 per cent.

It added that inflation has “ticked up” in the US due to tariffs and a weakening US dollar. 

But among the biggest adjustments to the IMF’s forecasts comes from Australia’s largest trading partner, China, which is expected to grow at 4.8 per cent in 2025 — 0.8 per cent more than what the IMF predicted in April.

“This revision reflects stronger-than-expected activity in the first half of 2025 and the significant reduction in US–China tariffs,” the report said.

Another major emerging market, India, was forecast to grow by 6.4 per cent this year and next year.