The foundation’s updated World Economic Outlook report says global growth is expected to be 3% this year and 3.1% in 2026. This is up from previous forecasts released in April (2.8% and 3% respectively). Forecasts for the world’s two largest economies, the US and China, have also been improved. The UK will be the third fastest growing economy among the G7 countries this year and next, after the US and Canada.
Pierre-Olivier Gourinchas, chief economist at the IMF, said in comments to the Financial Times that he sees “fragile resilience” in the global economy despite the chaotic imposition of high duties on US trading partners in recent months. He added that growth was less affected because many of the duties ended up not being as harsh as originally planned.
Gurinsha also noted that the weakening U.S. dollar has helped support the global economy. The U.S. currency has fallen nearly 9% this year against a basket of currencies, including the euro and pound, amid concerns about a trade war as well as the independence of the Federal Reserve (Fed). Since many foreign companies and emerging economies have debts in the U.S. currency, its depreciation makes it cheaper to service those debts.
