The International Monetary Fund (IMF) raised its growth forecasts for both the U.S. and global economies, saying that President Donald Trump\u2019s tariffs have so far proved less damaging than expected. However, the agency warned that the trade measures still pose serious risks to medium-term stability.<\/p>\n\n\n\n
According to the IMF\u2019s World Economic Outlook, the U.S. economy will expand 2% in 2025 \u2014 slightly higher than the 1.9% forecast in July and 1.8% in April. Growth is projected to reach 2.1% in 2026. Globally, output is expected to rise 3.2% this year and 3.1% next year, showing a modest but steady recovery despite trade tensions.<\/p>\n\n\n\n
IMF Chief Economist Pierre-Olivier Gourinchas said the global economy remains \u201cresilient but vulnerable.\u201d He noted that Trump\u2019s 100% tariff threats on Chinese imports continue to create uncertainty that could dampen investment and hiring.<\/p>\n\n\n\n
Gourinchas said that booming investment in artificial intelligence has provided a strong counterweight to trade disruption. \u201cThere are echoes in the current tech investment surge of the dot-com boom of the late 1990s,\u201d he said. \u201cIt was the Internet then; it is AI now.\u201d<\/p>\n\n\n\n
Major U.S. companies, including AMD and Oracle \u2014 which recently announced an expanded partnership \u2014 have seen their shares surge 80% this year. Rising valuations in AI-related stocks have boosted household wealth and helped sustain consumer spending.<\/p>\n\n\n\n
The IMF warned that while AI is driving productivity, a market correction could slow growth if investment momentum fades. Stronger spending could also push central banks to keep interest rates higher for longer, it added.<\/p>\n\n\n\n
The IMF report said that many importers and retailers are bearing the brunt of new U.S. tariffs, with limited evidence that foreign producers are absorbing the costs. \u201cMost of the cost burden has fallen on domestic firms,\u201d the report noted, adding that price increases are gradually filtering through to consumers.<\/p>\n\n\n\n
Core inflation in the U.S. has risen to 2.9%, up from 2.7% a year ago, while job creation has slowed to near stagnation. Gourinchas warned that \u201cthe tariff shock is here and further dimming already weak growth prospects.\u201d<\/p>\n\n\n\n
He added that much of the resilience seen in global output comes from temporary factors, such as front-loaded imports and emergency supply-chain rerouting, rather than fundamental strength.<\/p>\n\n\n\n
China has managed to stabilize growth by redirecting exports to Europe and Asia. The IMF expects its economy to expand 4.8% in 2025 and 4.2% in 2026. However, Gourinchas cautioned that \u201cChina\u2019s dependence on exports and property sector debt make its recovery fragile.\u201d<\/p>\n\n\n\n
In Europe, Germany\u2019s higher defense spending is supporting a modest rebound. The eurozone is projected to grow 1.2% this year \u2014 up from 1% in July \u2014 and 1.1% next year. The IMF said stronger fiscal support is helping offset trade weakness and industrial stagnation.<\/p>\n\n\n\n
Overall, the IMF forecasts reflect cautious optimism. While AI-driven investment is lifting productivity and demand, renewed trade shocks could still derail progress. \u201cIt is too soon to say we are fully in the clear,\u201d Gourinchas said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tariffs weigh on trade but AI surge fuels resilience The International Monetary Fund (IMF) raised its growth forecasts for both the U.S. and global economies, saying that President Donald Trump\u2019s tariffs have so far proved less damaging than expected. However, the agency warned that the trade measures still pose serious risks to medium-term stability. According […]<\/p>\n","protected":false},"author":10772,"featured_media":13066,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3016,3019,3022,3023,3020,3015,3017,3018,3013,3021],"class_list":{"0":"post-13064","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-ai-investment-boom","9":"tag-amd-oracle-partnership","10":"tag-china-exports-europe","11":"tag-eurozone-recovery","13":"tag-imf-growth-forecast-2025","14":"tag-inflation-and-trade","15":"tag-pierre-olivier-gourinchas","17":"tag-u-s-economy-2-percent-growth"},"_links":{"self":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13064"}],"version-history":[{"count":1,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13064\/revisions"}],"predecessor-version":[{"id":13067,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/posts\/13064\/revisions\/13067"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=\/wp\/v2\/media\/13066"}],"wp:attachment":[{"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalgazette.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}