Global growth has so far been relatively unscathed by the US’s ongoing tariff spats, according to the International Monetary Fund (IMF), with growth of 3% projected in 2025 and 3.1% in 2026.
This is higher than the respective 2.8% and 3% forecast in the previous report in April.
The latest World Economic Outlook noted the pause on tariffs and a de-escalation of trade tensions between the US and China as factors, which have helped improve growth forecasts.
“Despite these welcome developments, tariffs remain historically high, and global policy remains highly uncertain, with only a few countries having reached fully fleshed-out trade agreements,” IMF chief economist Pierre-Olivier Gourinchas said in a speech in Washington that accompanied the report’s release.
Output projections could be cut by 0.3% for 2026 if tariffs are reset at higher levels on the August 1 deadline given by Trump, Gourinchas added.
The upgrade to the world outlook reflects factors including a strong degree of trade “front-loading” in recent months, referring to a rush of imports into the US.
This has happened as businesses and households tried to get ahead of planned increases to US tariff rates, following Mr Trump’s “liberation day” announcements in April, the report said.
The IMF said front-loading had “shaped economic activity in the first half of the year”, adding that it was “creating exposures that could amplify the impact of any potential negative shocks”.
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“The overall picture hides notable cross-country differences, with forecasts predicting inflation will remain above target in the United States and be more subdued in other large economies,” the report said.
Meanwhile, UK GDP growth is predicted to lag the world average — sitting at 1.2% this year, and 1.4% in 2026, the IMF said. Those projections are unchanged from revised forecasts set out in May.