IMF chief economist Pierre-Olivier Gourinchas. Photo: David Paul Morris/Bloomberg
The IMF raised its global growth forecasts for 2025 and 2026 slightly, citing stronger-than-expected purchases ahead of an August 1 jump in US tariffs and a drop in the effective US tariff rate to 17.3pc from 24.4pc. But it warned that the global economy faced major risks including a potential rebound in tariff rates, geopolitical tensions and larger fiscal deficits that could drive up interest rates and tighten global financial conditions.
“The world economy is still hurting, and it’s going to continue hurting with tariffs at that level, even though it’s not as bad as it could have been,” said Pierre-Olivier Gourinchas, chief economist at the International Monetary Fund.