The recent IMF’s World Economic Outlook 2025 presents a picture of a global economy standing steady but still shadowed by uncertainty.

With global growth projected at 3.0 percent for 2025 and 3.1 percent in 2026, the headline numbers may seem encouraging. However, the underlying story reveals a more fragile situation: much of the resilience is not rooted in stable and strong long-term economic fundamentals.

Rather, it is driven by front-loaded trade activities in anticipation of higher tariff, short-term tariff adjustments, a weaker US dollar, and inconsistent financial conditions, where credit access and market confidence remain unstable.

Recent developments on trade policy further complicate the picture. On May 12, the US and China agreed to lower tariffs imposed after the April 2 escalation, for a 90-day period ending August 12. The US also extended its broader tariff pause for most trading partners to August 1, beyond the earlier July 9 deadline.

However, warning letters issued by the US administration in July threaten even higher tariffs than those announced in April, creating renewed uncertainty.

Meanwhile, legal proceedings are ongoing in the US regarding the use of the International Emergency Economic Powers Act (IEEPA) as a legal basis for these tariff actions.

In the US, the passage of the One Big Beautiful Bill Act (OBBBA) in July brought short-term clarity to fiscal policy but raised concerns about long-term fiscal sustainability. Combined with tariff-induced trade disruptions, this has added to uncertainty in the overall growth outlook.

The US current account balance temporarily benefits from these trade measures; the country is still facing widening fiscal deficits. It was initially expected that the........

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