- The IMF warns that Donald Trump’s proposed tariffs and economic policies could disrupt global trade
- It predicts global economic growth of 3.3% for 2025 and 2026, below the historical average of 3.7%
- The IMF urges Trump’s administration to avoid drastic policy shifts that could destabilise the U.S. and global economies
The International Monetary Fund (IMF) has raised concerns over potential global economic disruptions stemming from the policies of incoming U.S. President Donald Trump.
The IMF highlighted that Trump’s proposed tariffs could escalate trade tensions, disrupt supply chains, and distort trade flows.
These measures, deregulation, and tax cuts may stimulate short-term economic growth in the U.S. Still, the IMF cautioned that they could lead to inflationary pressures, destabilise markets, and undermine the global role of the U.S. Treasury bonds.
The IMF’s biannual world economic forecast emphasised the risks of Trump’s policies. It noted that during his previous tenure, Trump’s trade war with China and tariff disputes with the European Union disrupted global trade.
He has threatened tariffs on China, Mexico, and Canada and proposed imposing 100% tariffs on BRICS countries if they establish a rival currency to the U.S. dollar.
While these measures might initially boost the U.S. economy, the IMF warned they could result in an inflationary boom followed by a sharp economic downturn. This could weaken confidence in U.S. Treasury securities, traditionally considered among the world’s safest investments.
Excessive deregulation under Trump’s administration could also cause the U.S. dollar to surge uncontrollably, diverting capital from emerging markets and slowing global growth. Additionally, the IMF noted that Trump’s proposed deportations of undocumented immigrants could reduce the U.S.’s potential economic output and heighten inflationary pressures.
Global economic outlook
The IMF has forecast global economic growth of 3.3% for 2025 and 2026, below the historical average of 3.7%. This projection remains unchanged, as higher U.S. growth is expected to counterbalance weaker performance in other major economies.
IMF Chief Economist Pierre-Olivier Gourinchas acknowledged that recent years have seen significant global disruptions, including the COVID-19 pandemic and the war in Ukraine, which triggered the largest inflation spike in four decades.
He suggested the global economy could now enter a period of relative stability but warned that dramatic shifts in U.S. policy could jeopardise this balance.
Under the Biden administration’s policies, the IMF expects the U.S. to maintain its position as the fastest-growing G7 economy, with a growth rate of 2.7% in 2025 and 2.1% in 2026.
However, these projections could be undermined by the implementation of Trump’s proposed economic measures.
The IMF strongly warned Trump’s team to avoid policies that could destabilise the U.S. and global economies, emphasising the need for careful management to sustain growth and economic stability.
IMF projects 3.2% growth for Nigeria, predicts inflation drop to 25% by 2025, 14% by 2029
Meanwhile, TheRadar earlier reported that the International Monetary Fund projected that Nigeria’s economy will record 3.2 per cent growth, while inflation will decline to 25 per cent in 2025 and further decline to 14 per cent in 2029.
It noted that for Nigeria, the Gross Domestic Product (GDP) growth projection for 2025 is a 0.2 per cent increase from its earlier projection in July, while 2024 GDP growth will remain at 2.9 per cent, which is a decline when compared to its July projection.