WASHINGTON (AP) — The International Monetary Fund said Tuesday that the U.S. and global economies will grow slightly more this year than previously expected as the Trump administration’s tariffs have so far proven less destructive than expected, but the agency also said broad tariffs still pose risks.
united states economy The IMF forecasts a 2% expansion in 2025 in its influential semi-annual forecast, the World Economic Outlook. This is slightly higher than the IMF’s forecast of 1.9%. Last updated in July and 1.8% in April. The IMF says the U.S. will grow 2.1% next year, just one-tenth of a percentage point faster than previously predicted.
However, the current outlook is still revised downward from a year ago, a sign that international lenders expect tariffs to weaken the U.S. economy by creating more uncertainty for businesses. Last October, the IMF predicted that the US growth rate this year would be 2.2%.
All forecasts also point to a slowdown from 2024, when the U.S. economy expanded at a faster pace of 2.8%.
Meanwhile, the global economy’s growth rate this year is expected to be 3.2%, an upward revision from the IMF’s July forecast of 3%, and is expected to reach 3.1% in 2026, the same as the previous forecast.
The IMF said the U.S. and global economy is performing better than expected, but it is too early to say it is all clear as President Trump continues to threaten tariffs and changes in international trade patterns may take time to emerge.
For example, on Friday, President Trump threatened: 100% mandatory All imports from China were targeted, causing a sharp decline in the stock market.
Pierre-Olivier Grinchat, the IMF’s chief economist, said at a press conference that import taxes and Continuing threats to impose further obligations It is creating continued uncertainty for many businesses and weighing on the global economy.
“The tariff shock is here, further dimming the already weak growth outlook,” he said.
Grinchas also said rapid investment in artificial intelligence in the form of huge data centers and widespread computing power is helping offset drag from trade and a boost to the U.S. economy. However, if a financial market bubble forms and then bursts, business investment and consumer spending could slow significantly, he said.
“The current surge in technology investment has remnants of the dot-com boom of the late 1990s,” he said. “Back then it was the internet, now it’s AI.”
The stocks of two companies active in the AI field, AMD and Oracle, have been announced. Expanding Partnership Tuesdaythe company’s stock price has risen 80% this year.
Grinchas said the rise in AI-related stock prices is increasing Americans’ wealth and stimulating consumer spending, just as companies are ramping up investment in advanced computer chips and building data centers. He said stronger spending and investment could prompt the central bank to raise interest rates over time.
Grinchas also cited several reasons why the U.S. and global economies have remained resilient after widespread tariffs were imposed earlier this year.
“First and foremost, the tariff shock itself is smaller than initially feared due to a number of trade agreements and exemptions,” he said. “Also, most countries refrained from retaliating and kept trade systems open. The private sector also proved agile, bringing forward imports and rerouting supply chains.”
By bringing forward imports, many U.S. companies were able to stock up on goods before the tariffs took effect and avoid or delay price increases.
However, many of these factors only reflect “temporary relief rather than the underlying strength of economic fundamentals,” the IMF report said.
The IMF also said U.S. import price data shows that importers and retailers have so far been paying the lion’s share of tariffs, rather than foreign companies, as many Trump administration officials had expected. Over time, these companies are likely to pass on more of the price increases to consumers, the report said.
According to the IMF’s forecast, there are signs that some of the downsides of the tariff hike are beginning to emerge. Core inflation, which excludes volatile food and energy categories, rose to 2.9%, up from 2.7% a year ago, according to the Fed’s recommended metrics. Hiring has come to a near standstill, which may partly reflect a more cautious stance on the part of many companies given the uncertainty posed by higher tariffs.
The IMF’s forecast is slightly more optimistic than many private economists expected. The National Association for Business Economics, a group of academics and business economists, predicted Monday that the U.S. will grow by just 1.8% this year and 1.7% in 2026.
Nearly two-thirds of economists surveyed by NABE said they still think the administration’s mandate is slowing growth by up to 0.5 percentage points.
Meanwhile, China has weathered the blow from U.S. tariffs by sending more goods to Europe and Asia than to the United States, the IMF said. As the currency depreciated, exports became cheaper. The IMF forecasts that China’s economy will grow by 4.8% this year and by 4.2% in 2026, the same as in July.
Grinchas said that while China’s economy has become increasingly dependent on exports, the real estate sector continues to struggle with high levels of debt.
“It’s becoming increasingly difficult to see how we can sustain this,” he added.
Grinscha said that in Europe, Germany is accelerating growth by increasing government spending to build up its military. The IMF now expects growth in the 20 euro-using countries to be 1.2% this year, up from the 1% forecast in July, and 1.1% next year, the same as three months ago.
The IMF is the lending institution of 191 countries and works to promote economic growth and financial stability and reduce global poverty.
