Economic uncertainty continues to loom over Americans, with the International Monetary Fund (IMF) forecasting ongoing challenges in its latest World Economic Outlook report, released this week.
This quarterly update is the first since President Donald Trump returned to the White House, with U.S. tariffs playing a pivotal role in the IMF's assessment. The IMF anticipates that these trade policies will have a detrimental impact on global growth and inflation.
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Pierre-Olivier Gourinchas, the IMF’s economic counselor and director of the research department, emphasized the gravity of the situation, stating that trade policy uncertainty is off the charts. The IMF's forecast aligns with assessments from several private sector economists.
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Although the White House has suggested that these economic pains will be short-lived, Gourinchas countered that perspective.
"We have a box in our report that looks at the long-term impact of the tariffs if they are maintained, and it is negative for all regions just like the short-term impact," he explained. "So we're seeing a negative impact in the short term, in the medium term, in the long term."
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While the IMF’s outlook has worsened since earlier this year, it does not predict an imminent recession in the U.S. However, the likelihood of one has increased, with the chance rising from 25% to 40% over the past six months.
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