• IMF raises global growth forecast to 3% for 2025 due to recent tariff adjustments.
• The US effective tariff rate has decreased to 17.3%, down from 24.4% in April.
• India is projected to maintain a growth rate of 6.4%, reinforcing its status as the fastest-growing major economy.
• Risks remain, including potential future tariff increases and geopolitical tensions affecting global trade.
• The IMF warns that despite improvements, inflation in the US is likely to remain above target levels.

The International Monetary Fund (IMF) has adjusted its global growth forecast upward, projecting a growth rate of 3% for 2025 and 3.1% for 2026, largely due to significant adjustments in U.S. tariff policies and improving financial conditions, according to Reuters and BBC.

This increase is a response to stronger-than-expected purchases ahead of an anticipated increase in tariffs, alongside the effective U.S. tariff rate dropping to 17.3%, compared to 24.4% in earlier estimates. Despite this positive adjustment, the IMF cautioned about ongoing risks, including potential tariff rebounds and geopolitical tensions, as noted by Newsweek and Al Jazeera.

The upgrade also comes with an expectation that global inflation will decline to 4.2% in 2025 and 3.6% in 2026, though inflation is projected to stay above targets in the United States as tariffs are passed on to consumers, as reported by Reuters and Dawn.

India is expected to continue its strong growth, with projections set at 6.4% for both 2025 and 2026, contributing to its recognition as the world's fastest-growing major economy, according to India Times and India Times.

While the IMF's outlook reflects a cautious optimism, it emphasizes that future developments regarding U.S. tariffs, particularly the deadlines for further increases, remain a significant concern for global economic stability. The potential for future tariff increases could negatively impact growth if not carefully managed, as mentioned by Al Jazeera and Reuters.