Trade uncertainty could worsen global economic challenges: IMF economist

Disruptions to global supply chains caused by the uncertainty surrounding tariff hikes and trade tensions could worsen an already complex economic landscape, according to Pierre-Olivier Gourinchas, chief economist of the International Monetary Fund (IMF). His remarks followed the IMF's latest downgrade of its global economic growth projections, unveiled in the World Economic Outlook report released on Tuesday.

The IMF now forecasts global growth at 2.8 percent for 2025, a sharp 0.5 percentage points reduction from its January estimate, with a further slowdown to 3 percent projected for 2026. This downward revision follows the United States' announcement of sweeping "reciprocal tariffs" on April 2, which has driven global tariff rates to their highest levels in a century, creating what the report describes as "a major negative shock" to global economic growth.

Advanced economies face particular headwinds, with collective growth expected at just 1.4 percent in 2025 and 1.5 percent in 2026. The United States saw the most dramatic revision -- its 2025 outlook slashed by 0.9 points to 1.8 percent due to mounting policy uncertainty, intensifying trade tensions, and softening domestic demand.

"As you have this uncertainty about tariffs and trade relations, some of these frictions could get amplified along the supply chains. You don't know if your suppliers are going to be there. You don't know if your customers are going to be there. The supply chain may have to be reoriented. That injects another layer of uncertainty to a situation that's already quite complex," said Gourinchas. The report warns that if trade tensions escalate further, global growth could face an even steeper decline and trigger significant volatility in financial markets.

The IMF calls on countries to enhance dialogue, stabilize trade policies, and maintain the independence of monetary policies to strengthen global economic resilience and prevent the buildup of risks that could lead to uncontrollable situations.

Trade uncertainty could worsen global economic challenges: IMF economist

UN Secretary-General Antonio Guterres has renewed his urgent call for an end to the Middle East conflict to prevent the worsening global hunger crisis, Farhan Haq, deputy spokesperson for the UN Secretary-General, said at the UN headquarters in New York on Tuesday.

Speaking at a press briefing, Haq quoted the UN Chief as saying that amid the escalating tensions in the Middle East, diplomacy must prevail.

He also cited the warnings from UN agencies that the conflict in the Middle East is feared to plunge tens of millions more into food insecurity. "The secretary general asserts once more that the war in the Middle East must stop, diplomacy must prevail, all Security Council resolutions must be implemented. The latest one, Resolution 2817, must be respected as we see that countries in the Gulf continue to be targeted," Haq said.

"And the World Food Program (WFP) is warning today that the total number of people around the world facing acute levels of hunger could reach record numbers in 2026 if the escalation in the Middle East continues to destabilize the world's economy. New analysis by WFP estimates that almost 45 million more people could fall into acute food insecurity or worse if the conflict does not end by the middle of the year, and if oil prices remain above 100 dollars a barrel. These would add to the 318 million people around the world who are already food insecure," he said.

Haq also highlighted the strategic significance of the Strait of Hormuz, noting that the key to restoring its safe and secure operation lies in bringing an end to the conflict.

He said that UN Secretary-General Antonio Guterres would travel to Brussels later on Tuesday for urgent consultations with European officials on navigation through the Strait of Hormuz and follow-up safeguard measures.

UN chief renews urgent call for end to Middle East conflict to prevent worsening global hunger crisis