IMF says July forecasts to take into account trade deals, uncertainty
By David Lawder and Karin Strohecker
(Reuters) -The International Monetary Fund said on Thursday that its next global growth forecast in July will take into account both positive and negative trade developments but declined to predict a tariff-driven GDP downgrade similar to that released by the World Bank this week.
IMF spokesperson Julie Kozack said that since the last release of the Fund's World Economic Outlook in April, there have been some positive developments that could support improved economic activity, including a major tariff reduction between the U.S. and China and an initial trade deal between the U.S. and Britain.
"So taken together such announcements combined with the April 9 pause on the high level of tariffs, these could support activity relative to the forecast that we had in April," Kozack told a regular IMF news briefing. "But nonetheless, we do have an outlook for the global economy that remains subject to heightened uncertainty, especially as trade negotiations continue."
The IMF also will take into account U.S. President Donald Trump's added steel and aluminum tariffs, she said. These have now reached 50% for all exporters.
The World Bank on Tuesday slashed its 2025 global growth forecast by four-tenths of a percentage point from its January forecast to 2.3%, saying that higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies.
The development lender cut forecasts for nearly 70% of all economies - including the U.S., China and Europe, but the prior forecast came before Trump took office and imposed tariffs on nearly all trading partners.
The IMF's steep April forecast cut did take into account Trump's initial tariff assault, reducing the 2025 global growth outlook by half a percentage point from its January forecast to 2.8%, with a slower decline in inflation.
Kozack said the next IMF World Economic Outlook update will be issued toward the end of July, but did not provide a specific date.
Trump's "reciprocal" tariff pause is currently scheduled to expire on July 8, with many countries seeking to negotiate tariff-reducing deals before then. And Trump has said there could be extensions of that deadline for countries engaged in good faith negotiations with the U.S.
Kozack said that more recent activity indicators reflect "a complex economic landscape" with first quarter front-loading activity to beat tariffs, while there has been some diversion of trade and an unwinding of import activity in the second quarter. There also could be more trade deals or other developments to take into account.
"So all of this creates kind of a complicated picture for us, with some upside risk, some other developments, and we'll take all of these developments together into account as we update our forecast," Kozack said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
19 minutes ago
- Yahoo
Exclusive: Trump's tariff deal ‘quietly' added 10% raise which nobody is complaining about anymore, says his former commerce secretary
Wilbur Ross, former Commerce Secretary and a key architect of Trump's first-term trade policy, describes Trump's current tariff strategy as a deliberate evolution: moving faster, hitting harder, and using broader executive powers to impose tariffs for both economic and diplomatic leverage. The Trump administration's use of tariffs has sparked debate over the ultimate goals of its economic strategy. However, a former Cabinet member and key trade advisor to the President has suggested there is an underlying logic to the approach. Since winning the Oval Office, President Trump has announced an evolving range of policies. with economic sanctions spinning higher on some trade partners while others have been granted pauses. Many of the announcements have not come through official White House channels; for example, Trump threatened a 50% tariff on the EU in April in a bid to get European negotiators to the table—by posting on his social media site, Truth Social. Indeed, Trump has come under scrutiny from Beijing, arguably the most critical region for the U.S. to make a deal, who claim America's tariff tactics have been 'coercion and blackmail' when instead it should 'convey information to the Chinese side…through relevant parties.' But Wilbur Ross, Trump's Commerce Secretary in his first administration, says there's a clear tactic at play beneath Trump's bluster. The 87-year-old banker turned D.C. power player said there is an 'art' to Trump's dealmaking, as White House Press Secretary Karoline Leavitt has suggested; Ross told Fortune in an exclusive interview: 'Well, everybody's reaction to [tariffs] was first shock and amazement, but the actual retaliatory measures that they put in were fairly modest—even China didn't match in dollar for dollar. 'There's a real reason for that, I think the other countries, as they've thought about it, have recognized that while they have to talk very bravely for their domestic political constituencies… They also recognize that at the end of the day, they can't afford a tit-for-tat escalating trade war with us.' And this was a fact Trump was relying on, continued Ross: 'One of the earliest things he put in was that 10% tariff on everything from everywhere. 'Nobody is even complaining about that anymore. When you think about it, in the normal course, getting quietly to do a 10% tariff on everything from everywhere was a huge achievement, even if he didn't get anything else. But because he followed it with these much more extreme things, it makes the 10% look like it's not such a big bother. 'But it's a huge number, and he's been collecting it every day.' Indeed, imported goods alone into the U.S. in 2024 stood at $3.36 trillion—even before tax, duties, and levies were collected (worth $82 billion) and before imported services are added to those figures. Even 10% of near-$3.4 trillion is an eye-watering sum to add to federal budgets, though some items like autos and steel are even higher. Indeed nations like China, Canada, and Mexico are all already subject to more than the baseline 10% universal tariff. When Ross spoke to Fortune in a previous exclusive interview earlier this year, he said President Trump would be all the more confident in his second term because he now better understands the inner workings of Washington, D.C., and has a stronger mandate courtesy of a solid election sweep. And President Trump's tactics, which have included everything from threatening a 25% hike on Apple's iPhones specifically to raising sanctions to more than 150% on China at some points, reflect the path Ross expected. After all, as Secretary, Ross was one of the key allies in Trump's team when renegotiating America's position on the North American Free Trade Agreement (NAFTA). At the time, Trump was a fierce critic of the deal with Mexico and Canada and wanted to withdraw from the agreement and begin negotiating from there. Ross felt the better tactic was to threaten such action and keep an exit as a last resort, an opinion that Trump eventually came around to agreeing with. Likewise, having been appointed in 2017 Ross oversaw the tariff action in the first Trump administration which included sanctions on Chinese goods as well as aluminum and steel more widely. 'He has started out on a much more adventurous path than last time,' Ross told Fortune this week. 'Broader in scope and more extreme in terms of the numbers themselves.' Trump has three objectives, he adds: shrinking trade deficits, producing revenue to offset his 'One Big, Beautiful Bill' and achieving other diplomatic purposes such as the flow of fentanyl into the U.S. and global defense spending. 'He has a much more fulsome, much more complicated agenda than before,' Ross explains. 'It's also different in…that last time I was very careful to set the groundwork to do public hearings, stakeholder meetings, to do written reports, to set a whole record so that under the Administrative Procedures Act we would be relatively safe from people trying to knock it out in court. 'This time, they did a very different thing. They went in mostly just by his say so using the IFA, the Emergency Powers Act, and they ran into a snag at the Court for International Trade.' This snag may alter the course of tariff reaction on the account of businesses, he added, because their investment timelines may shift based on when the tariffs are legally approved. But Ross added: 'Most people are operating under the assumption that sooner or later, he'll get something like what he was looking for…and therefore, while it's slowed down a bit, [I] don't think it will derail [trade talks] because [foreign governments] also know there are other ways he could punish them rather than just the tariffs. 'So it's a bump in the road, but I don't think it's a huge pothole that would wreck the car.' This story was originally featured on
Yahoo
20 minutes ago
- Yahoo
Oil prices jump after Israel's attack on Iran and it could lead to higher gas costs
Oil prices have jumped following Israel's attack on Iran as experts warn the conflict could lead to higher gas costs. The price of a barrel of benchmark U.S. crude jumped 6.8 percent to $72.65 Friday. Brent crude, the international standard, rose 7.1 percent to $74.30 a barrel. 'Gas prices will likely start to rise across much of the country later this evening in response to Israel's attacks on Iran, which have caused oil prices to surge. For now, I expect the rise to be noticable, but limited. Approx 10-25c/gal thus far, but this could change,' industry expert Patrick De Haan wrote on X. Iran is one of the world's major producers of oil and if a wider war escalates, it could slow the flow of Iranian oil to U.S. customers and elsewhere. 'Iran knows full well that Trump is focused on lower energy prices and actions by Iran that impact Middle East supply and consequently raise oil prices damage Trump politically,' Andy Lipow, president of Lipow Oil Associates consulting firm, told CNN. Past attacks involving Iran and Israel have seen prices for oil spike initially, only to fall later 'once it became clear that the situation was not escalating and there was no impact on oil supply,' said Richard Joswick, head of near-term oil at S&P Global Commodity Insights. The Secretary of the Organization of the Petroleum Exporting Countries warned industry executives not to 'raise false alarms.' 'There are currently no developments in supply or market dynamics that warrant unnecessary measures,' the organization said on X. Israel said 200 fighter jets took part in strikes on more than 100 targets in Iran overnight in an escalation that threatens to spark a wider conflict in the Middle East. Israel said Iran has launched more than 100 drones towards Israel in response - but Tehran has denied these reports, according to Iranian media. Trump firmly put the U.S. in Israel's corner after the attacks. The president said he'd given Tehran 'chance after chance to make a deal' that would have headed off the strikes by putting restrictions on the country's nuclear weapons program and complained that Iranian negotiators had never been able to come to an agreement. 'I gave Iran chance after chance to make a deal. I told them, in the strongest of words, to 'just do it,' but no matter how hard they tried, no matter how close they got, they just couldn't get it done,' he wrote on Truth Social. Trump also said he'd warned Iran that Israel 'has a lot' of American-made military hardware — 'the best and most lethal' — and is quite proficient in using it. 'Certain Iranian hardliner's spoke bravely, but they didn't know what was about to happen. They are all DEAD now, and it will only get worse!' he added. 'Iran must make a deal, before there is nothing left. No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE,' the president wrote. The Associated Press contributed reporting Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
24 minutes ago
- CNBC
Here's how to turn off public posting on the Meta AI app
AI generative images of women kissing while mud wrestling and President Donald Trump eating poop are some of the conversations users are unknowingly sharing publicly through Meta's newly launched AI app. The company rolled out the Meta AI app in April, putting it in direct competition with OpenAI's ChatGPT. But the tool has recently garnered some negative publicity and sparked privacy concerns over some of the wacky — and personal — prompts being shared publicly from user accounts. Besides the mud wrestlers and Trump eating poop, some of the examples CNBC found include a user prompting Meta's AI tool to generate photos of the character Hello Kitty "tying a rope in a loop hanging from a barn rafter, standing on a stool." Another user whose prompt was posted publicly asked Meta AI to send what appears to be a veterinarian bill to another person. "sir, your home address is listed on there," a user commented on the photo of the veterinarian bill. Prompts put into the Meta AI tool appear to show up publicly on the app by default, but users can adjust settings on the app to protect their privacy. To start, click on your profile photo on the top right corner of the screen and scroll down to data and privacy. Then head to the "suggesting your prompts on other apps" tab. This should include Facebook and Instagram. Once there, click the toggle feature for the apps that you want to keep your prompts from being shared on. After, go back to the main data and privacy page and click "manage your information." Select "make all your public prompts visible only to you" and click the "apply to all" function. You can also delete your prompt history there. Meta has beefed up its recent bets on AI to improve its offerings to compete against megacap peers and leading AI contenders, such as Google and OpenAI. This week the company invested $14 billion in startup Scale AI and tapped its CEO Alexandr Wang to help lead the company's AI strategy. The company did not immediately respond to a request for comment.
