Trade tensions and a reversal in the artificial intelligence (AI) boom are among the main risks to global economic growth, the International Monetary Fund (IMF) has warned.
Its comments came in its latest world economic outlook, where it described the global economy as steady, with growth expected to remain resilient this year.
The IMF's forecast was produced ahead of Donald Trump's threat at the weekend to impose tariffs on eight European countries opposed to his proposed takeover of Greenland.
The fund also emphasized that the independence of central banks was paramount for global economic stability and growth.
The economic watchdog projected global growth to reach 3.3% this year - an increase from its previous forecast of 3.1% - before slowing slightly to 3.2% in 2027.
IMF chief economist Pierre Olivier Gourinchas stated: We have a picture of a global economy that is growing at - it's not outsized growth rates, but it's quite resilient, quite robust. He noted that global economic activity surpassed previous expectations, despite the adverse effects of Trump's tariffs.
However, the IMF cautioned that risks to the global outlook remain tilted to the downside, warning of the potential for an abrupt market correction if expectations about AI growth prove overly optimistic.
Gourinchas highlighted that even a moderate market correction could affect wealth and lead to reduced consumer spending and investment plans by businesses.
In addition to AI risks, the IMF pointed to trade tensions as a potential source of prolonged uncertainty, which could disrupt global economic stability through impacts on financial markets and supply chains.
On the national front, the IMF reported that the UK grew by 1.4% in 2025, slightly up from its previous projection of 1.3%. The UK's growth forecast for this year remains at 1.3%, placing it as one of the fastest-growing economies in the G7.
Chancellor Rachel Reeves celebrated this forecast, while critics like shadow chancellor Mel Stride underscored the modest nature of the growth revisions.
Looking forward, the IMF expects UK inflation to ease back to the 2% target by the end of the year, driven by changes in regulated industries, along with a broader global inflation decline.
The IMF reiterated the critical nature of central bank independence, warning that pressures to conform to government borrowing needs could jeopardize long-term economic growth and stability.
Overall, this outlook presents a complex interplay of growth, risks, and the pivotal role of policy-making in navigating future economic challenges.
