Tue, 29 Jul 2025

Tue, 29 Jul 2025 IMF upgrades global growth forecast as tariffs ease

A softening of Trump tariffs since April means global growth could be stronger, the IMF says
Global Economic Growth:
* The IMF has upgraded its global economic growth forecast, predicting 3% in 2025 and 3.1% in 2026.
* This is an increase from 2.8% and 3% predicted in April, but still below pre-pandemic historical average of 3.7%.
* Stronger US imports due to firms trying to beat higher import taxes contributed to the upgrade. US Tariffs:
* Some US tariffs on goods have been softened.
* Higher tariffs and uncertainty could lead to weaker growth and slower economic activity.
* The IMF warned that trade tensions will continue to hurt the global economy. UK Economic Growth:
* UK growth is predicted to be 1.2% this year and 1.4% in 2026, unchanged from revised forecasts set out in May.
* The UK will be the third fastest growing economy among advanced economies this year and next after the US and Canada. Inflation:
* Global price rises are expected to fall to 4.2% in 2025 and 3.6% in 2026.
* Inflation is likely to remain above target in the US due to import taxes being passed on to consumers. IMF Warning:
* The IMF warned that the boost from front-loading imports will fade away, risking a drag on economic activity in the second half of the year and into 2026.
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