The 'World Economic Outlook' of the IMF is too nice for a world

Copyright © HT Digital Streams Limit all rights reserved. By openly avoiding rules, the US has indicated that it is right, with ‘possibly’ measured by what one can get away. (Reuters) Summary The July update of this International Monetary Fund (IMF) report has only tips to offer a global trade response to the US president’s tariff unrest. India stares at a 25%plus US levy, but most countries are in the same boat and can drive uniformly to save the WTO. At the best of times, the World Economic Outlook (Weo) published by the International Monetary Fund (IMF) holds no risk to human vision with blinding new insights. Ditto for its three quarterly updates. But these are not the best times. US President Donald Trump on Wednesday used his own microblog platform Truth Social to declare that ‘although India is our friend’, the import of here must pay a 25%rate, plus a fine for different US grievances, from August 1. Other countries also had to face such posts. While the world’s economies are throwing and rotating in the midst of the meager seas of trade uncertainty, policy viewers look at world bodies such as the IMF for clues on how to reach quieter waters. Also read: IMF Outlook: The Good, The Bad and the Unsaid The latest WeO update, released on Tuesday, offers little navigation aid. This makes some minor adjustments, mostly upward, to its growth raises released in April. Should we be happy that the global economy is expected to grow by 3% in 2025, instead of the 2.8% estimated in April, and at 3.1% instead of 3% in 2026? Certainly, even if it is lower than the rates on which a post-pandemic world hoped and could reach if it wasn’t for the unrest of the trade. The WeO sets the growth prospects of the Indian economy at 6.4% for both 2025-26 and 2026-27, 0.2 and 0.1 percentage points higher than its April figures. Although it is good news, it is just as in the prevailing context. Also read: Dani Rodrik: How ideology sometimes trumps substantial interests, as the April estimates of the April are based on Trump who acted his ‘Liberation Day’ tariff threats, they accepted sharp hikes through the US and retaliation erected by its trading partners, with a fierce impact on inflation and growth in America and elsewhere. Trump’s actual import levies have since shown some moderation. He has announced several trade transactions, although the cumulative effect of his policy increases the rates from an average of 2.5% before Trump to almost 18% once his agreement is done and dusted off. But these rates are not the only problem. Trumpian rates most favorable the principle that is charged with the idea that a tariff is levied on the import of one member of the World Trade Organization (WTO) is no higher than the levy on the shipments of another member, except as part of a free trade agreement. The WTO’s dispute resolution mechanism also has no place in the new order determined by the White House. By openly avoiding rules, the US has indicated that it is right, with ‘possibly’ measured by what one can get away. How should the rest of us adapt to the WTO’s abandonment through the world’s largest economy and issuer of the currency in which foreign trade is usually billed? The WeO update is largely quiet. Also read: India should use Trump’s playbook on Trump for a fair trade. Not that the report has nothing to say about what can be done. It advises structural reforms in areas such as labor markets, education, regulation and competition, as well as steps to promote technical progress and acceptance of AI. It does not spell out motherhood and apple pie, but these are invisible attachments on the list. To be honest, the Weo risks beyond the anodyne to represent plurilateral or regional solutions, but without any effect. Perhaps the rest of the world could forge a treaty to keep through WTO norms without the US. It will not trump. But we are at the raw end of his bargain anyway. For this, why blame the lack of lodestars in the IMF air? As we know, the mistake is not in the stars, but in ourselves. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Imf #Donald Trump #Tariff Hike Read Next Story