The International Monetary Fund (IMF) says that the tariffs of the president of the United States, Donald Trump, have increased world risks of financial stability.
This warning was part of the GLOG FMI financial stability report published on Tuesday, as world financial leaders gather in Washington to discuss the uncertainty based on tariff policies.
The IMF pointed out that Trump’s fee rate increased the adjustment adjustment levels reached the great depression, which saw that tariffs increased to 60 percent of duration one of the worst economic periods in modern history, a recession that led to more thanking its jobs.
Global undulation effect
The global undulation effect stood out in the IMP report. “The risks of global financial stability have increased significantly, driven by stricter global financial conditions and independent economic uncertainty,” said the IMF.
The fund projects a drop in the economic growth of the United States at 1.8 percent for the year, a recession of its previous prognosis of 2.7 percent and a complete percentage point since this time last year.
It is also forecast that China will grow more slowly because or imposed US tariffs, inducing additional tariffs on goods, including pharmaceutical products and Beijing’s reciprocal tariffs on US goods. The IMF now hopes that it will expand 4 percent in 2025, which is more than a half -point decrease in previous forecasts.
In Europe, the IMF predicts that the eurozone of 20 countries will see a growth of 0.8 percent this year and 1.2 percent in 2026. The new report is a decrease of 0.2 percent of its prognosis at the beginning of the year.
The IMF also predicts a decrease in Mexico for the year, with a fun of growth by 0.3 percent by 2025. But he hopes that he will recover next year with a growth of 1.4 percent. In Latin America and the Caribbean, the organization of 191 members awaits a 1.4 percent decrease in the growth of its 2024 forecasts, but expects growth to recover in 2026.
“I do not remember another instance in my professional life in which a single act of a president or prime minister has resulted in such a sudden reduction in a material or week,” Stuart Mackintosh, executive director of the Group of Thirty of Financial Thought, told Al Jazeera.
Bond markets recently increased in the United States earlier this month after Trump’s tariffs entered into force. As a result, interest rates are customary in other countries of the world, which makes loans become more expectations in other countries.
“Emerging market economies that already face the highest real financing costs in a decade now may need to refinance their debt and finance fiscal spending to higher costs,” said the IMF.
The IMF also said that other geopolitical risks, such as military conflicts, could further stimulate uncertainty.
A consensus of economist
The concerns echo those of other prominent economists worldwide who expect a recession. Goldman Sachs said he expects “a very low growth of the United States of 0.5 percent” and said that the possibilities of a recession next year are 45 percent, the aging of the report of the “risk of recession induced by the investment bank” published on Monday.
Earlier this month, a macroconomic forecast survey carried out by the National Business Economics Association showed that more than half of respondents believe that the probable recession in 2025 could be as high as 49 percent. JPMorgan economists now believe that recession possibilities are 60 percent.
“The greatest probability of a global recession and the probability of an American recession increase. It has increased. We have to deal with that. When you think about the consensus position of US economists, that changed drastically,” Mackintosh added.
“In the fall of last year, most American business economists thought it would not be a recession this year. In fact, most consensus positions saw the economy of the United States as the most strong advanced economy in the world, and that could improve.
The United States Federal Reserve has also predicted that growth will be knitted this year, 1.7 percent. This occurs when the president has pressed for the Central Bank to reduce interest rates, that Fed President Jerome Powell has refused to do. Last week, Trump said Powell’s departure cannot arrive soon enough and said that if he asked Powell to leave the role, he would. Powell has continually said that the rest of his mandate would serve, which ends in May 2026.
Pierre Olivier Gourinchas, the main economist of the IMF, retreated Trump’s biggest rhetoric attacks against Powell, saying that “the independence of the Central Bank remains an cornerstone”, for a group of tortators.