IMF warns that economic output will slow in US
Sean Whelan, Washington Correspondent, discusses the reaction to the IMF's latest World Economic Outlook that warned a US trade war was pushing the global economy into a "significant slowdown"
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RTÉ News
2 days ago
- RTÉ News
IMF says July forecasts to take into account trade deals, uncertainty
The International Monetary Fund said 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 US and China and an initial trade deal between the US 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 US President Donald Trump's added steel and aluminum tariffs, she said. These have now reached 50% for all exporters. The World Bank earlier this week 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 US, 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. Trump has said there could be extensions of that deadline for countries engaged in good faith negotiations with the US. 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.
Irish Times
3 days ago
- Irish Times
Ireland uniquely exposed to reversal of globalisation, IMF warns
Since it acceded to the World Trade Organisation in 2001, China has surfed the globalisation wave like no other. The figures are eye-watering. Between 2001 and 2023, Beijing's GDP (gross domestic product) increased from $1.3 trillion (€1.13 trillion) to $18 trillion, while its annual trade in goods jumped from $510 billion to $6.3 trillion. If you're looking for a northern hemisphere equivalent, Ireland, on a per capita basis, might well fit the bill. There's certainly no other country in Europe that has experienced a bigger transformation in trade and foreign direct investment than Ireland. More than 900,000 new jobs have been created in the Irish economy since 2012. READ MORE The International Monetary Fund (IMF), in its latest staff report on the Irish economy, published yesterday, highlights the ongoing strength of the domestic economy and the positive growth outlook, even with the uncertainty created by Donald Trump's tariffs. But it also warns of the unique threat to growth and prosperity here from the current backlash against globalisation. 'A sustained reversal of globalisation would put at risk the Irish economic model, which has benefited from free trade and capital flows,' the Washington-based fund warns. Will rent reform make building apartments viable? Listen | 40:12 It notes that heightened global uncertainty and tariffs, while contained at the moment, are likely to 'weigh on household and business spending decisions'. Not anything we don't know already, but a reminder that Ireland's economic success has been contingent on global tailwinds that may be about to turn. In his response, Minister for Finance Paschal Donohoe said: 'I note and share the IMF's assessment of external risks, notably the reversal of globalisation, the ongoing disruption caused by regional conflicts, domestic capacity constraints, and the uncertainty in relation to corporation tax receipts. 'While I acknowledge Ireland's vulnerability to the rise in global uncertainty, our economy has demonstrated resilience in the face of consecutive large shocks.' On the domestic front, the IMF's report zeros in on supply-side constraints that 'could delay the attainment of infrastructure and housing goals'. Time will tell.
RTÉ News
4 days ago
- RTÉ News
The Irish economy has performed well and entered 2025 in a strong position
The Irish economy has performed well, with the domestic economy, as measured by the Modified Gross National Income, estimated to have grown by about 4% in 2024, according to the International Monetary Fund's annual review of the Irish economy. The IMF Staff Report for the 2025 Article IV Consultation said the domestic economy is projected to continue growing, albeit at a slower pace in a highly uncertain global environment. It also noted there are significant external downside risks to growth and public finances, which are vulnerable to external trade and tax policy shifts. Ireland's 2025 Article IV Consultation was set against the backdrop of Budget 2025 which was framed in the context of a continued need to improve public services and accelerate infrastructure to support a growing population and the competitiveness of the Irish economy. The Report sets out the views of the IMF on the current position of the Irish economy and identifies key structural factors that will have a bearing on domestic living standards in the years ahead. The Minister for Finance Paschal Donohoe said he welcomed the IMF's assessment of the results achieved and noted the risks highlighted in the report. "I note and share the IMF's assessment of external risks, notably the reversal of globalisation, the ongoing disruption caused by regional conflicts, domestic capacity constraints, and the uncertainty in relation to corporation tax receipts," said Minister Donohoe. "While I acknowledge Ireland's vulnerability to the rise in global uncertainty, our economy has demonstrated resilience in the face of consecutive large shocks. "I acknowledge the IMF's recommendation of a broadly neutral fiscal stance for the upcoming budget and five-year fiscal plan." Minister Donohoe said the Programme for Government has committed to delivering a clear and credible macroeconomic and fiscal framework and one that would prioritise continued economic resilience through investment in capital spending and funds for future needs. "I welcome the IMF's strong support for the two savings funds which the Government has established. By the end of this year, I expect a total of €16 billion to be saved in the funds."
