IMF warns trade tensions still cloud outlook

The International Monetary Fund (IMF), warned on Friday that risks related to trade tensions continue to cloud the global economic outlook and uncertainty remains high despite some increased trade and improved financial conditions.

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IMF First Deputy Managing Director Gita Gopinath said the fund would update its global forecast later in July given “front-loading ahead of tariff increases and some trade diversion,” along with improved financial conditions and signs of continued declines in inflation.

In April the IMF slashed its growth forecasts for the United States, China and most countries, citing the impact of US tariffs on imports now at 100-year highs and warning that rising trade tensions would further slow growth.

At the time, it cut its forecast for global growth by 0.5 percentage points to 2.88 for 2025, and by 0.3 percentage points to 38. Economists expect a slight upward revision when the IMF releases an updated forecast in late July.

Gopinath told finance officials from the Group of 20 major economies who met this week in South Africa that trade tensions continued to complicate the economic outlook.

"While we will update our global forecast at the end of July, downside risks continue to dominate the outlook and uncertainty remains high," she said, in a text of her remarks.