IMF lifts global growth forecast but flags risk from trade measures

The International Monetary Fund on Tuesday raised its near-term global growth outlook slightly but warned that mounting trade restrictions and other shocks are beginning to sap momentum and could drag the world economy into slower growth. In its World Economic Outlook, the IMF projected global growth of 3.2 percent this year and 3.1 percent in 2026, while forecasting U.S. growth of 2.0 percent in 2025 and 2.1 percent in 2026.

The modest upgrade for this year largely reflects temporary factors that masked underlying weakness, the IMF said. Firms and households in several countries accelerated imports ahead of planned tariffs, and a weaker dollar supported trade flows. Investment tied to advances in artificial intelligence also boosted activity. "It is not as bad as we feared but it is worse than we anticipated a year ago and worse than we need," IMF chief economist Pierre-Olivier Gourinchas said, adding that risks to the outlook remain tilted to the downside.

The fund cautioned that the benefits of frontloaded purchases and other short-term offsets will fade, exposing the broader slowdown implied by protectionist measures and supply-chain frictions. In a sequential analysis that...