IMF Highlights Trade Tensions as Key Risk to Global Economic Growth

Mon Jan 19 2026 23:45:35 GMT+0200 (Eastern European Standard Time)

The International Monetary Fund warns that trade tensions and a decline in AI growth pose significant risks to global economic growth as they release their latest economic outlook.

In its updated economic outlook, the IMF identifies trade disruptions and a potential downturn in artificial intelligence investments as major concerns affecting global growth. While projections indicate a steady growth rate of 3.3% for this year, the IMF stresses the need for central bank independence to maintain economic stability.

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 said the independence of central banks was paramount for global economic stability and growth.

The economic watchdog said global growth was projected to reach 3.3% this year - an increase from its previous forecast of 3.1% - before slowing slightly to 3.2% in 2027.

Speaking to the BBC, IMF chief economist Pierre Olivier Gourinchas said: 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 added, the global economy has been shaking off the trade disruptions of 2025, and it's coming out ahead of what we were expecting. However, Trump’s tariffs have definitely slowed down global activity, but other factors have offset this to some degree.

The report highlights that global economic progress is being supported by increasing investments related to technology, including AI. Yet, it cautions that expectations about AI growth could be overly optimistic, potentially leading to a market correction that could impact wealth and consumption patterns.

Furthermore, the IMF noted that trade tensions might flair again, prolonging uncertainties that could weigh down economic activity. Domestic and geopolitical tensions, it said, could disrupt financial markets and supply chains.

The IMF estimates the UK grew by 1.4% in 2025, with a forecast for 1.3% growth for this year, making it the third fastest growing economy in the G7 after the US and Canada.

Chancellor Rachel Reeves stated that the UK is on course to be the fastest growing European G7 economy for this year and next.

The IMF expects global inflation to decline from an estimated 4.1% in 2025 to 3.4% by 2028. In particular, the report noted that UK inflation is projected to hit the 2% target by the end of the year as economic conditions evolve.

Lastly, the IMF stressed the need for central bank independence, stating that it is crucial for macroeconomic stability and economic growth, warning against the risks of fiscal dominance that could arise in environments with high borrowing needs.