· 3 min read
illuminem summarises for you the essential news of the day. Read the full piece on The Washington Post or enjoy below:
🗞️ Driving the news: The International Monetary Fund (IMF) reports that the global economy has performed better than expected this year despite the ongoing trade disruptions caused by President Donald Trump's tariffs
• Global growth is projected at 3.2% for 2025, which is slightly higher than previous forecasts, but still represents a slowdown from pre-pandemic growth levels
• The IMF warns that the long-term effects of the tariffs and uncertainty surrounding U.S. trade policy could erode future growth prospects
🔭 The context: While the global economy has shown resilience this year, the IMF is cautious about future prospects
• The 2025 growth rate is higher than earlier forecasts due to factors like reduced tariff escalation and preemptive imports ahead of new taxes
• However, the IMF is predicting further economic slowing in 2026, with growth expected to dip to 3.1%
• The U.S. economy is expected to expand by 2% this year, with slight growth in 2026, but the ongoing tariff burden is a significant drag, exacerbated by tight immigration policies limiting the labor force.
🌍 Why it matters for the planet: While the global economy has avoided an immediate downturn due to Trump’s tariffs, there are still significant concerns
• The tariffs have shifted costs, with U.S. importers and consumers absorbing much of the burden, which could lead to higher prices in the U.S.
• The IMF also expresses concern about the slowing Chinese economy, which faces risks from a massive property bubble and debt-deflation dynamics
• Both of these factors could affect global trade and investment, with cascading effects on climate policies and international economic cooperation
⏭️ What's next: As the global economy faces these headwinds, the IMF suggests that 2026 will likely bring slower growth
• Key risks include continued trade policy uncertainty, a potential slowdown in AI-driven investments, and the economic fallout from geopolitical tensions, particularly involving China
• The focus will be on managing tariffs and trade relationships while ensuring that inflation remains controlled
💬 One quote: “The tariffs seem to fall squarely on U.S. importers,” said IMF chief economist Pierre-Olivier Gourinchas, highlighting the uneven burden of the trade policies on U.S. businesses and consumers
📈 One stat:The global growth forecast for 2025 is 3.2%, slightly above earlier predictions, but still lower than the pre-pandemic average of 3.7%
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