Today, the International Monetary Fund released its highly anticipated World Economic Outlook (affectionately abbreviated “WEO”). And as I tuned in to the launch from IMF headquarters, I noticed a glaring contrast between the report’s upgrade to global growth forecasts and its overall gloomy tone, reflected in the headline: “Global Economy in Flux, Prospects Remain Dim.”
Our top numbers cruncher, Hung Tran, tells me that’s kind of the point. Hung worked at the IMF for six years, during which he had a hand in these kinds of reports. The IMF is trying to tell us, he says, that the economy is faring “better than feared,” but “worse than what we need.”
On the positive side, Hung points to upgraded economic growth estimates for countries such as the United States, India, and China. This is due in part, he adds, to the world’s relative restraint from deploying retaliatory tariffs against the United States.
But on the grimmer side, Hung notes that the WEO lists a number of “downside risks,” from a “possible slowdown in the AI boom” to “high public debt” to “pressure on central banks,” which could destabilize financial markets. But “the WEO emphasizes the importance of policy and policy cooperation,” without getting to the roots of the problem, Hung says: “US protectionism and Chinese mercantilism.” That, he says, is what is “squeezing many countries in the rest of the world.”
“To say that we need good policies and cooperation is not a solution,” Hung warns.
Your AC Intel starts there. |
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Our experts are posted around IMF and World Bank headquarters and elsewhere in Washington, sending us their thoughts about the meetings in real time. Energy ace Reed Blakemore tells us that after the US-China trade spat this weekend, supply chains are “top of mind” for the officials meeting in Foggy Bottom, as China’s willingness to slap on new export controls “will continue to be hard to ignore, even if wider trade tensions cool.” |
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Trump 1.0 trade negotiators joined us at IMF headquarters to talk about the second administration’s tariff strategy. Kelly Ann Shaw, formerly deputy assistant to the president for international economic affairs, said that baseline tariffs on US imports are “likely to stay,” because they represent a “generational shift in US trade policy,” not just Trump’s whims. |
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Ireland’s central bank governor, Gabriel Makhlouf, dropped by Atlantic Council headquarters to make the case that amid massive global trade shifts, Europe must “deepen the single market.” But, he warned, the momentum to do so may be waning. |
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At Atlantic Council headquarters, Saudi Finance Minister Mohammed Aljadaan, who is also the chair of the International Monetary and Financial Committee, argued that despite worries that the United States would pull away from the IMF and World Bank, “the good news is, actually, the US is engaged.” |
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Charles Lichfield, director of economic foresight and analysis at the GeoEconomics Center, parses the World Bank’s new AgriConnect initiative, arguing it is really geared toward World Bank President Ajay Banga’s “new north star” of “making sure there are enough jobs for everyone,” including in countries that have not yet industrialized. |
Argentina’s Minister of Economy Luis Caputo and Central Bank President Santiago Bausili join us at Atlantic Council headquarters to talk about the country’s plans to restore economic stability, with a new lifeline from the United States in hand. |
Spain’s growth rate is estimated to be one of the highest among advanced economies—and the IMF further raised its forecast today. Minister of Economy, Trade, and Business Carlos Cuerpo stops by our headquarters to talk about his approach to managing the volatile global economy. |
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