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The IMF Will Revise Its Global Economic Projections, With Tariff Tensions Still Looming

The International Monetary Fund (IMF) warned that risks related to trade tensions continue to cloud the global economic outlook, and uncertainty remains high, despite a slight improvement in trade activity and financial conditions. 

IMF First Deputy Managing Director Gita Gopinath announced that the IMF will update its global economic projections at the end of July. This revision takes into account rising exports ahead of the tariff hike, shifting trade flows, improving financial conditions, and the continued downward trend in inflation, as quoted by Reuters on Sunday (July 20). 

In April, the IMF cut its growth projections for the United States (US), China, and most other countries, citing the impact of high US tariffs on imports, which are now at a 100-year high. 

The IMF also warned that escalating trade tensions could slow economic growth further. 

At that time, the IMF lowered its global growth projections by 0.5 percentage points to 2.8 percent for 2025, and by 0.3 percentage points to 3 percent for the following year. Economists expect a slight upward revision in the updated projections, which the IMF will release at the end of July. 

At the G20 finance officials meeting in South Africa last week, Gita stated that trade tensions continue to complicate the economic outlook. 

"Although we will update our global projections at the end of July, downside risks still dominate and uncertainty remains high," Gita said in her speech. 

She encouraged countries to resolve trade tensions and implement policy reforms to address domestic imbalances, including by reducing fiscal spending and restructuring debt pathways for sustainability. 

Gita also emphasized the importance of central banks adjusting their monetary policies prudently to the specific conditions of each country and emphasized the importance of maintaining central bank independence. This issue was one of the main points in the communique released by G20 finance officials. 

She added that, amid policy uncertainty and increased market volatility, capital flows to developing and emerging market countries remain slow but resilient. For many borrowing countries, financing conditions remain tight. 

Gita said that for countries with unsustainable debt burdens, proactive measures are crucial. She also reiterated the IMF's call for a timely and efficient debt restructuring mechanism. Gita also emphasized the need for further efforts on this issue, including by opening access for middle-income countries to utilize the G20 Common Framework for Debt Restructuring. 

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Tag: Gita Gopinath Global Economic IMF