National economy Global economy withstands Trump's tariff hammer, says IMF
The global economy appears to be more or less coping with US President Donald Trump's tariff hammer against international trade. The International Monetary Fund (IMF) has raised its growth forecasts.
29.07.2025, 17:48
SDA
The IMF economists now expect the global economy to grow by 3.0% in the current year. This is 0.2 percentage points higher than their last forecast in April, as the IMF announced on Tuesday in the update of its annual report on the global economy (WEO).
However, the IMF emphasized that it is difficult to make reliable forecasts. This is because the announcement of trade agreements, such as the recent one between the USA and the EU, could change the situation again. Nevertheless, the global economy would be weaker than last year, when GDP grew by 3.3%.
Tariff shock less severe than feared
"For the time being, the shock caused by the tariffs appears to be less severe than we had expected in April," IMF chief economist Pierre-Olivier Gourinchas emphasized to the AFP news agency. This is partly due to the announced tariff breaks and the tariff agreements that have now been reached.
In its current forecast, the IMF assumes that tariffs on imports into the United States will average 17.3 percent. This is significantly lower than the 24.4 percent in the last forecast from April. However, this would still be the highest tariffs since at least the 1930s.
The IMF wrote that companies' preparations for these punitive tariffs had boosted economic activity, as companies had built up inventories before they came into force. However, this will have an impact on future growth, warned Gourinchas: "What they already have in stock, they will no longer need to procure later in the year or next year."
The emerging markets in particular are likely to grow by an average of 0.4 percentage points more than in the previous estimate, the IMF wrote. In contrast, the industrialized countries are only expected to improve by 0.1 percentage points.
Europe still in neutral
Growth of 1.9% (+0.1 percentage points) is now expected for the USA. However, this would still be a massive drop compared to 2024, when the US economy grew by 2.8%. The reason for this is inflation, where the effects of tariffs are becoming visible, explained Pierre-Olivier Gourinchas.
The eurozone is expected to grow by 1.0 percent this year. In April, economists had only expected +0.8 percent. However, the improvement was mainly due to the boom in Ireland, where pharmaceutical exports benefited from advance orders from the USA.
Among the major countries, Germany is not making any headway. The northern neighbor is only likely to achieve a mini growth of 0.1 percent, while in France (+0.6 percent) and Spain (+2.5 percent) the economy will probably gain more momentum. With an increase of half a percent, Italy is not a growth engine either. There is nothing in the IMF report on the Swiss economy.
China facing headwinds despite acceleration
Conversely, the forecasts for China have been significantly revised upwards by 0.8 percentage points to 4.8 percent. This means they are now closer to the 5.0% achieved in 2024. According to the IMF economist, this is due in particular to the build-up of inventories of Chinese products in the USA.
China is still facing headwinds, Gourinchas emphasized. Domestic demand is still very weak and consumer confidence is low. In addition, the real estate sector, the weak point of the Chinese economy, will weigh on growth in both 2025 and 2026.
