The International Monetary Fund (IMF) has warned that the full impact of U.S. tariff policies will only become evident over time, with potential consequences for inflation, monetary policy, and global growth.
IMF Managing Director, Kristalina Georgieva, told reporters on Wednesday that American companies could pass higher import costs to consumers, fuelling inflation. She cautioned that diverted goods originally bound for the U.S. could also spark a new round of tariff hikes elsewhere.
“The resilience of the global economy has not yet been fully tested by the tariffs dispute,” Georgieva said, recalling that while a global trade war was avoided under former President Donald Trump, the world economy had still suffered significant damage.
She also pointed to the challenges posed by the frequently changing U.S. tariff rates, which add uncertainty for businesses and policymakers.
In July, the IMF projected global growth at 3 per cent in 2025 and 3.1 per cent in 2026.
The IMF and World Bank will hold their annual meetings next week, while the IMF will release its updated global economic forecast on October 14.
