The shock wave of tariffs is about to impact the global economy, and the IMF will lower its growth forecast
Three weeks after US President Trump actually announced a trade war with the world, new economic forecasts and surveys will point to the initial impact of the trade war.
A few blocks away from the White House, the International Monetary Fund (IMF) will lower its expectations for economic growth in its World Economic Outlook released on Tuesday.
The following day, PMI from Japan to Europe and then to the United States will provide the first coordinated manufacturing and service sector activity since Trump's global tariffs (currently partially suspended) were announced on April 2nd. Business surveys of major economies are also on the schedule.
Overall, this picture will provide an opportunity for finance ministers and central bank officials from various countries gathered in Washington to make preliminary damage assessments of Trump's attempts to reshape the global trading system.
IMF Managing Director Kristalina Georgieva said on Thursday, "Our new economic growth forecast will include a significant downward adjustment, but not a recession. We will also see some countries' inflation forecasts raised. We will remind that continued high uncertainty will increase the risk of financial market pressure
Bloomberg Economic Review states, 'During potential destructive crises, IMF forecasts tend to be optimistic.'. In the four major crises we studied, the IMF's preliminary assessment of the direct impact on global economic growth underestimated it by 0.5%. No matter how much the IMF may initially lower its growth forecast, history shows that the ultimate blow will be even worse
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