Published by Global Banking & Finance Review®
Posted on July 18, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleThe IMF plans to revise its global economic forecast in July, citing ongoing trade tensions as a major concern despite improved conditions.
By Andrea Shalal
WASHINGTON (Reuters) -The International Monetary Fund warned on Friday that risks related to trade tensions continue to cloud the global economic outlook and uncertainty remains high despite some increased trade and improved financial conditions.
IMF First Deputy Managing Director Gita Gopinath said the fund would update its global forecast later in July given "front-loading ahead of tariff increases and some trade diversion," along with improved financial conditions and signs of continued declines in inflation.
In April the IMF slashed its growth forecasts for the United States, China and most countries, citing the impact of U.S. tariffs on imports now at 100-year highs and warning that rising trade tensions would further slow growth.
At the time, it cut its forecast for global growth by 0.5 percentage points to 2.8% for 2025, and by 0.3 percentage points to 3%. Economists expect a slight upward revision when the IMF releases an updated forecast in late July.
Gopinath told finance officials from the Group of 20 major economies who met this week in South Africa that trade tensions continued to complicate the economic outlook.
"While we will update our global forecast at the end of July, downside risks continue to dominate the outlook and uncertainty remains high," she said, in a text of her remarks.
She urged countries to resolve trade tensions and implement policy changes to address underlying domestic imbalances, including scaling back fiscal outlays and putting debt on a sustainable path.
Gopinath also underscored the need for monetary policy officials to carefully calibrate their decisions to specific circumstances in their countries, and stressed the need to protect central bank independence. This was a key theme in the G20 communique released by finance officials.
Gopinath said capital flows to emerging markets and developing economies remained sluggish, but resilient, in the face of increased policy uncertainty and market volatility. For many borrowers, financing conditions remained tight.
For countries with unsustainable debt, proactive moves were essential, Gopinath said, repeating the IMF's call for timely and efficient debt restructuring mechanisms.
More work was needed on that issue, including allowing middle-income countries to access the G20's Common Framework for Debt Restructuring, she said.
(Reporting by Andrea ShalalEditing by Frances Kerry)
The IMF warned that risks related to trade tensions continue to cloud the global economic outlook and that uncertainty remains high.
The IMF plans to update its global growth forecast later in July, with expectations of a slight upward revision from the previous cuts.
Gopinath urged countries to resolve trade tensions, implement policy changes to address domestic imbalances, and ensure sustainable debt management.
Capital flows to emerging markets and developing economies are described as sluggish but resilient, despite increased policy uncertainty and market volatility.
The IMF suggests that proactive moves are essential for countries with unsustainable debt, including timely and efficient debt restructuring mechanisms.
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