The International Monetary Fund (IMF) has revised the global economic growth forecast, now projecting a drop to 2.8% in 2025, influenced heavily by US President Donald Trump's tariffs. IMF economic counsellor Pierre-Olivier Gourinchas highlighted that rising trade tensions, particularly with China, have resulted in lower bilateral trade and increased financial risks. The report warns of higher borrowing costs globally, especially impacting emerging markets already facing financing challenges. The outlook for the Euro area is also bleak, with growth expected to slow significantly in the coming years.
The IMF reported that US tariffs have significantly shifted the global economy towards a downturn, decreasing the growth forecast for 2025 to 2.8%.
The repercussions of Trump's tariffs extend beyond the US, with rising bond yields in previously stable countries increasing global borrowing costs.
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