The IMF Cautions That trade Uncertainty Might Make the World’s Economic Problems Worse.
According to Pierre-Olivier Gourinchas, Chief Economist of the International Monetary Fund (IMF), disruptions to global supply chains brought on by uncertainty surrounding tariff rises and trade disputes may exacerbate an already complex economic environment.
His comments came after the World Economic Outlook report, which was published on Tuesday, revealed the IMF’s most recent lowering of its forecasts for global economic growth. With a further downturn to 3 percent predicted for 2026, the IMF has revised its 2025 global GDP prediction to 2.8 percent, a dramatic 0.5 percentage point drop from its January estimate.
Following the United States’ declaration of broad “reciprocal tariffs” on April 2, which caused global tariff rates to reach their highest levels in a century, this downward modification was made.
With collective growth predicted to be only 1.4 per cent in 2025 and 1.5 per cent in 2026, advanced economies confront unique challenges. The most significant modification was in the United States, whose 2025 estimate was cut by 0.9 points to 1.8 percent as a result of growing trade tensions, declining domestic demand, and increasing policy uncertainty.
“Some of these frictions may become more pronounced along the supply chains due to the uncertainty around tariffs and trade relations. The availability of your suppliers is uncertain. You have no way of knowing whether your clients will be present. It could be necessary to reorganise the supply chain. That adds even more uncertainty to an already complicated issue,” Gourinchas added.
Also Read:
The First Worldwide Levy on Shipping’s Greenhouse Gas Emissions is Agreed Upon by Major Governments
The GCC Summit and Bar Abdelatty’s Unwavering Position on Palestinian Issues
