The rekindling of trade tensions due to US tariffs and protectionism warns the IMF of global economic pressure.

The International Monetary Fund (IMF) warned in its latest World Economic Outlook on Tuesday that the global economy is showing signs of pressure from the large-scale tariffs and protectionist policies of the United States, despite overall performance still being better than previously expected. The IMF predicts that the global economy will grow by 3.2% in 2025, higher than the forecast of 3% in July. However, by 2026, the growth rate is expected to slightly slow to 3.1%. The report notes that this upward revision is mainly driven by "short-term factors," including increased activity of businesses and households stocking up on goods before high tariffs take effect, and a weakening US dollar boosting global trade. However, in the medium to long term, the IMF warns that the global economy faces "dim prospects," with both short-term and long-term growth momentum weakening. "The situation is not as bad as we initially feared, but worse than we anticipated a year ago," said IMF Chief Economist Pierre-Olivier Gourinchas at a press conference. "Overall risks still lean to the downside." The IMF predicts that the US economy will slow to 2% growth in 2025 and maintain at 2.1% in 2026; the euro area economy is expected to rebound to 1.2% this year, slightly decreasing to 1.1% next year. The organization points out that the AI investment boom to some extent offsets the impact of tariffs. The IMF emphasizes in the report that excluding the statistical fluctuations caused by stocking up in advance, the annual average growth rate of the global economy in the second half of 2025 to 2026 is estimated to be only 3%, a decrease of 0.6 percentage points from 3.6% in 2024. Gourinchas said, "Despite multiple offsetting factors, the impact of tariffs is further suppressing already weak growth prospects. We expect a slowdown in the second half of this year and only partial recovery in 2026." The IMF points out that the impact of high tariffs is gradually becoming evident, with core inflation in the United States rising again and a slight increase in the unemployment rate. At the same time, inflation levels in multiple countries remain higher than central bank targets, increasing uncertainty about price prospects and making monetary policy operations more challenging. Furthermore, the organization warns that global public debt continues to expand. Particularly in Europe, government spending needs to be cut to address additional fiscal pressures such as population aging, increasing defense spending, and energy security. The report states, "Calculations of debt sustainability post-COVID become more complex, constrained by high corporate debt levels, deteriorating fiscal deficits, higher interest rates, and weak growth prospects."