The International Monetary Fund (IMF) has revised its global growth forecast upwards, citing a sharp rise in trade as businesses act quickly to sidestep sweeping US tariffs introduced under President Donald Trump.

The updated World Economic Outlook now projects global growth at 3% for 2025, a notable increase from 2.8% forecast back in April.

While the global economy expanded 3.3% in 2024, the IMF expects a slightly slower 3.1% pace for 2026—an improvement nonetheless from its earlier 3% prediction.

However, concerns remain over the sustainability of this momentum.

“There are reasons to be very cautious,” said IMF Chief Economist Pierre-Olivier Gourinchas in an interview with AFP.

“Businesses were trying to frontload, move stuff around, before the tariffs were imposed, and so that’s supporting economic activity,” he explained.

“There is going to be payback for that. If you stock the shelves now, you don’t need to stock them later in the year or into the next year.”

This means trade activity is likely to slow in the second half of 2025 and continue tapering into 2026.

According to the IMF report, “The global economy has continued to hold steady, but the composition of activity points to distortions from tariffs, rather than underlying robustness.”

Since re-entering the White House, President Trump has imposed a 10% levy on nearly all trading partners, with additional duties on vehicles, steel, and aluminium.

However, the full implementation of some tariffs has been postponed until 1st August, delaying measures originally planned for April.

In a temporary easing of trade tensions, the US and China also agreed to suspend certain triple-digit tariffs for 90 days.

That truce is set to expire on 12th August, though ongoing negotiations could extend it further.

According to the IMF, the US effective tariff rate now stands at 17.3%, a stark contrast to the 3.5% average seen across the rest of the world.