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IMF forecasts global slowdown, warns of rising risks to financial stability following Trump tariffs

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The International Monetary Fund (IMF) has revised its global economic growth projections downward, citing rising risks to the global economy. According to the IMF, the global economy is expected to grow by 2.8% in 2025, down from 3.0% in January. The decline in growth prospects is attributed to the ongoing trade tensions and the potential for a "sharp repricing of risk assets" as a result of the trade war between the US and the rest of the world. The IMF has also warned of the potential for a global financial crisis and has urged regulators to be on high alert. The growth prospect for the world economy is now the weakest since the COVID-19 pandemic.

    1. Global financial stability risks have increased significantly, driven by tighter global financial conditions and heightened economic uncertainty.
    2. Emerging market economies already facing the highest real financing costs in a decade may now need to refinance their debt and fund fiscal spending at higher costs.
    1. If sustained, this abrupt increase in tariffs and attendant uncertainty will significantly slow global growth.
    2. Growth prospects could improve immediately if countries ease their current trade policy stance and implement clear and predictable trade rules.
    3. The risks to the global economy have increased and are firmly to the downside.
    1. There's a tonne of uncertainty around this, but there are both inflationary and disinflationary forces.
    2. The tariffs represent more of a disinflationary risk than an inflationary risk.
    1. The IMF has downgraded the UK's growth forecast, raising serious concerns about the lack of confidence and direction under Labour. They have also revised up significantly their forecast for inflation.
IMF forecasts global slowdown, warns of rising risks to financial stability following Trump tariffs