IMF Revises Global Outlook, Lifts Thai GDP 2025 Forecast Amid Tariff Tensions

Global Forecast Sees Modest Upward Revisions

The International Monetary Fund (IMF) has revised its global growth forecast for 2025 and 2026. Stronger-than-expected order volumes helped drive this change, especially ahead of the U.S. import tariffs set to take effect on August 1. The U.S. has lowered its average tariff rate from 24.4% to 17.3%, providing temporary relief.

Despite this, the IMF warned that serious risks remain. These include possible reinstatement of tariffs, rising geopolitical tensions, and widening fiscal deficits. These factors could lead to tighter global financial conditions.

Global GDP is now expected to grow by 3.0% in 2025 and 3.1% in 2026. These figures reflect slight increases from earlier estimates. However, they remain below the pre-pandemic average of 3.7%.

Thai GDP 2025 Forecast Improved

The IMF has increased its forecast for Thai GDP 2025 from 1.8% to 2.0%. For 2026, growth is projected at 1.7%, up from the previous 1.6%. These modest gains suggest a gradual recovery. Businesses in Thailand can benefit from this outlook by planning ahead.

Companies should consider working with experienced local advisors. Our accounting and tax services in Thailand help businesses stay compliant and adapt to changing economic conditions.

Tariff Pressures and Inflation Trends

Global inflation is expected to decline to 4.2% in 2025 and 3.6% in 2026. However, U.S. inflation may remain elevated due to ongoing tariff-related impacts. These taxes affect consumer prices directly and can reduce purchasing power.

Chief Economist Pierre-Olivier Gourinchas explained that many businesses placed large orders ahead of the new tariffs. This “front-loading” supports short-term growth but may cause a slowdown in the second half of 2025.

New Tariff Agreements Under Review

The IMF is currently reviewing recent U.S. agreements with the EU and Japan. These agreements set new tariffs at around 15%, close to the IMF’s base assumption of 17.3%. The deals came too late to include in the July forecast update.

Gourinchas noted that it’s still unclear whether these agreements will remain in effect. Future changes in trade policy could affect global performance.

U.S. Fiscal Outlook and Global Implications

The U.S. economy is now forecast to grow 1.9% in 2025 and 2.0% in 2026. While this is slightly better than earlier predictions, increased spending and tax cuts will widen the fiscal deficit. Tariff revenues may only cover about half of the gap.

The weakening U.S. dollar also stands out. Unlike previous trade conflicts, the softer dollar is easing financial conditions for other countries. At the same time, it amplifies the impact of U.S. tariffs abroad.

Conclusion

The global economy remains fragile. Although the Thai GDP 2025 forecast improved, uncertainties around tariffs and policy decisions persist. Businesses should monitor developments closely and take proactive steps to mitigate risks.

This summary is based on data and analysis from the original article by Prachachat Business.