The International Monetary Fund (IMF) warned that risks related to trade tensions still loom over global economic prospects, and uncertainty remains high, despite a slight increase in trade activity and financial conditions.
The First Deputy Managing Director of the IMF, Gita Gopinath, stated that the IMF will update its global economic projections at the end of July. This revision takes into account increased exports ahead of tariff increases, shifts in trade flows, improved financial conditions, and ongoing inflation decline trends, as quoted by Reuters on Sunday (20/7).
In April, the IMF cut its growth projections for the United States (US), China, and most other countries, citing the impact of high US tariffs on imports, which are now at their highest level in 100 years.
IMF also warned that increasing trade tensions could further slow economic growth.
At that time, IMF lowered its global growth projection by 0.5 percentage points to 2.8 percent for 2025, and by 0.3 percentage points to 3 percent for the following year. Economists expect a slight upward revision in the latest projections to be released by IMF at the end of July.
At the meeting of finance officials from G20 countries held in South Africa last week, Gita stated that trade tensions continue to complicate economic prospects.
"Although we will update the global projections at the end of July, the risk of decline still dominates and uncertainty remains high," said Gita in her speech.
I encourage countries to resolve trade tensions and implement policy reforms to address domestic imbalances, including by reducing fiscal spending and restructuring debt paths to make them sustainable.
Gita also emphasized the importance of central banks carefully adjusting their monetary policies according to the specific conditions in each country, and affirmed the importance of maintaining central bank independence. This issue became one of the main points in the statement released by G20 finance officials.
They added that, amid policy uncertainty and rising market volatility, the flow of capital to developing and emerging countries remains slow but still resilient. For many borrowing countries, financing conditions remain tight.
Gita's statement: For countries with unsustainable debt burdens, proactive measures are very important. She also reiterated the IMF's call for the importance of timely and efficient debt restructuring mechanisms.
Gita also emphasized the need for further efforts on this issue, including by opening access for middle-income countries to utilize the G20 Common Framework for Debt Restructuring.
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