Washington, Apr. 23, (dpa/GNA) – Sweeping tariffs imposed by US President Donald Trump and retaliatory measures from other nations are contributing to a worsening global fiscal outlook, the International Monetary Fund (IMF) warned on Wednesday.

According to the IMF’s latest Fiscal Monitor report, the new tariffs are triggering both supply and demand shocks, fuelling economic uncertainty, raising financing costs, increasing financial market volatility and weakening global growth prospects.

As a result, global public debt is expected to rise by 2.8 percentage points of gross domestic product (GDP) this year, pushing the total debt-to-GDP ratio above 95%.

This upward trend is likely to continue, the IMF said, with public debt rising to nearly 100% of GDP by the end of the decade.

Major economies including the United States, China, France, Britain, Brazil and South Africa are contributing significantly to the rise in global debt, the report noted.

While higher tariffs may boost government revenues in the short term, the IMF said that this effect is likely to be short-lived. As prices rise, import demand and domestic production tend to fall, undercutting revenue gains and further dampening economic output.

“Fiscal policy now faces a sharper trade-off between reducing debt, building buffers against uncertainties and accommodating spending
pressures, all amidst weaker growth prospects, higher financing costs and heightened risks,” the IMF wrote.

The fund on Tuesday lowered its global economic growth forecast for 2025 to 2.8%.

GNA

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