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

Ongoing Israeli military operations in Gaza and the West Bank have led to multiple deaths, arrests, and rising tensions, as both sides report violence and economic fallout.

The Israel Defense Forces (IDF) issued a statement on Monday, saying that during operations in the southern Gaza Strip that day, IDF troops killed three "militants" who had crossed the "yellow line" of the military ceasefire. The statement added that IDF forces would remain deployed in the area and would continue operations to eliminate threats.

On the same day, the Palestinian Ministry of the Interior in the Gaza Strip issued a statement saying that Mahmoud Al-Astal, head of the police investigation department in Khan Younis, southern Gaza, was shot and killed. According to sources, Al-Astal was a key member of the Palestinian Islamic Resistance Movement (Hamas). A Palestinian armed group in Gaza, backed by Israel, claimed responsibility for the shooting on Monday.

According to a report by the official Palestinian news agency on Monday, Israeli forces continued their raids across several areas of the West Bank and around Jerusalem, arresting more than 20 Palestinian residents and injuring one person. In some areas, the Israeli forces also conducted house searches, imposed roadblocks, and leveled farmland. Meanwhile, large numbers of Israeli Jewish settlers, under the protection of the Israeli military, entered Palestinian farmlands to graze livestock, damage olive trees, and assault Palestinian shepherds while attempting to seize animals, leading to clashes with local residents.

The Palestinian Ministry of Agriculture released a comprehensive report on Monday, saying that in 2025, the agricultural sector in the West Bank suffered systematic attacks by Israeli forces and Israeli Jewish settlers, resulting in direct economic losses exceeding 103 million U.S. dollars, an intensity rarely seen in recent years.

Tensions escalate as IDF operations continue in Gaza, West Bank