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| IMF upgrades global growth forecast as tariffs ease | IMF upgrades global growth forecast as tariffs ease |
| (about 1 hour later) | |
| The International Monetary Fund (IMF) has predicted stronger global economic growth than it forecast in April in part due to some US tariffs on goods being softened. | The International Monetary Fund (IMF) has predicted stronger global economic growth than it forecast in April in part due to some US tariffs on goods being softened. |
| A surge in US imports as firms tried to beat impending higher import taxes and actions by some governments to boost growth bumped up its latest forecast. | A surge in US imports as firms tried to beat impending higher import taxes and actions by some governments to boost growth bumped up its latest forecast. |
| However, higher tariffs and more uncertainty could lead to weaker growth and slower economic activity, the IMF warned. | However, higher tariffs and more uncertainty could lead to weaker growth and slower economic activity, the IMF warned. |
| Meanwhile, UK growth is predicted to be 1.2% this year, and 1.4% in 2026, unchanged from revised forecasts set out in May. | Meanwhile, 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 is set to be the third fastest growing economy out the world's so-called most advanced economies this year and the next, after US and Canada. | The UK is set to be the third fastest growing economy out the world's so-called most advanced economies this year and the next, after US and Canada. |
| The IMF, which is a group of 190 countries that work together to try to stabilise the global economy, said the upgrade to its global predictions included trade "front-loading" in recent months - referring to the rush of imports into the US. | |
| It forecast global growth of 3% in 2025 and 3.1% in 2026, up from 2.8% and 3% in its April report. | It forecast global growth of 3% in 2025 and 3.1% in 2026, up from 2.8% and 3% in its April report. |
| However, that is still below the 3.3% rate it had projected for both years in January, prior to US President Donald Trump taking office, and the pre-pandemic historical average of 3.7%. | |
| American firms rushed products into the country earlier this year to try to get ahead of new taxes on imports pledged by Trump. | |
| The IMF said this created risks that could add to any future economic shocks, including companies, having too much stock, making future imports less necessary. | The IMF said this created risks that could add to any future economic shocks, including companies, having too much stock, making future imports less necessary. |
| Also, firms may have to pay more to store goods, and there was also a risk of items becoming obsolete, it said. | Also, firms may have to pay more to store goods, and there was also a risk of items becoming obsolete, it said. |
| Pierre-Olivier Gourinchas, the IMF's chief economist, said a modest decrease in trade tensions, however fragile, had contributed to the resilience of the global economy. | |
| However, he added: "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." | |
| The IMF said the global pace of price rises was expected to fall to 4.2% in 2024 and 3.6% in 2026. | |
| But it said inflation would probably remain above target in the US as import taxes were passed through to US consumers in the second half of the year. |