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Fast Company
6 hours ago
- Business
- Fast Company
IMF raises 2025 growth forecast and warns against global trade tensions
NEWS Future tariff increases are not reflected in the IMF numbers, and could raise effective tariff rates further. International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. [Photo: Reuters/Yuri Gripas/File Photo] BY The International Monetary Fund on Tuesday raised its global growth forecasts for 2025 and 2026 slightly, citing stronger-than-expected purchases ahead of an August 1 jump in U.S. tariffs and a drop in the effective U.S. tariff rate to 17.3% from 24.4%. It warned, however, that the global economy faced major risks, including a potential rebound in tariff rates, geopolitical tensions, and larger fiscal deficits that could drive up interest rates and tighten global financial conditions. 'The world economy is still hurting, and it's going to continue hurting with tariffs at that level, even though it's not as bad as it could have been,' said Pierre-Olivier Gourinchas, IMF chief economist. In an update to its World Economic Outlook from April, the IMF raised its global growth forecast by 0.2 percentage point to 3.0% for 2025 and by 0.1 percentage point to 3.1% for 2026. However, that is still below the 3.3% growth it had projected for both years in January and the pre-pandemic historical average of 3.7%. It said global headline inflation was expected to fall to 4.2% in 2025 and 3.6% in 2026, but noted that inflation would likely remain above target in the U.S. as tariffs passed through to U.S. consumers in the second half of the year. The U.S. effective tariff rate – measured by import duty revenue as a proportion of goods imports – has dropped since April, but remains far higher than its estimated level of 2.5% in early January. The corresponding tariff rate for the rest of the world is 3.5%, compared with 4.1% in April, the IMF said. U.S. President Donald Trump has upended global trade by imposing a universal tariff of 10% on nearly all countries from April and threatening even higher duties to kick in on Friday. Far higher tit-for-tat tariffs imposed by the U.S. and China were put on hold until August 12, with talks in Stockholm this week potentially leading to a further extension. The U.S. has also announced steep duties ranging from 25%-50% on automobiles, steel and other metals, with higher duties soon to be announced on pharmaceuticals, lumber, and semiconductor chips. Such future tariff increases are not reflected in the IMF numbers, and could raise effective tariff rates further, creating bottlenecks and amplifying the effect of higher tariffs, the IMF said. Shifting tariffs Gourinchas said the IMF was evaluating new 15% tariff deals reached by the U.S. with the European Union and Japan over the past week, which came too late to factor into the July forecast, but said the tariff rates were similar to the 17.3% rate underlying the IMF's forecast. 'Right now, we are not seeing a major change compared to the effective tariff rate that the U.S. is imposing on other countries,' he said, adding it was not yet clear if these agreements would last. 'We'll have to see whether these deals are sticking, whether they're unravelled, whether they're followed by other changes in trade policy,' he said. Staff simulations showed that global growth in 2025 would be roughly 0.2 percentage point lower if the maximum tariff rates announced in April and July were implemented, the IMF said. The IMF said the global economy was proving resilient for now, but uncertainty remained high and current economic activity suggested 'distortions from trade, rather than underlying robustness.' Gourinchas said the 2025 outlook had been helped by what he called 'a tremendous amount' of front-loading as businesses tried to get ahead of the tariffs, but he warned that the stockpiling boost would not last. 'That is going to fade away,' he said, adding: 'That's going to be a drag on economic activity in the second half of the year and into 2026. There is going to be pay-back for that front loading, and that's one of the risks we face.' Tariffs were expected to remain high, he said, pointing to signs that U.S. consumer prices were starting to edge higher. 'The underlying tariff is much higher than it was back in January, February. If that stays … that will weigh on growth going forward, contributing to a really lackluster global performance.' One unusual factor has been a depreciation of the dollar, not seen during previous trade tensions, Gourinchas said, noting that the lower dollar was adding to the tariff shock for other countries, while also helping ease financial conditions. U.S. growth was expected to reach 1.9% in 2025, up 0.1 percentage point from April's outlook, edging up to 2% in 2026. A new U.S. tax cut and spending law was expected to increase the U.S. fiscal deficit by 1.5 percentage points, with tariff revenues offsetting that by about half, the IMF said. It lifted its forecast for the euro area by 0.2 percentage point to 1.0% in 2025, and left the 2026 forecast unchanged at 1.2%. The IMF said the upward revision reflected a historically large surge in Irish pharmaceutical exports to the U.S.; without it, the revision would have been half as big. China's outlook got a bigger upgrade of 0.8 percentage point, reflecting stronger-than-expected activity in the first half of the year, and the significant reduction in U.S.-China tariffs after Washington and Beijing declared a temporary truce. The IMF increased its forecast for Chinese growth in 2026 by 0.2 percentage point to 4.2%. Overall, growth is expected to reach 4.1% in emerging markets and developing economies in 2025, edging lower to 4.0% in 2026, it said. The IMF revised its forecast for world trade up by 0.9 percentage point to 2.6%, but cut its forecast for 2026 by 0.6 percentage point to 1.9%. —Andrea Shalal, Reuters The early-rate deadline for Fast Company's Most Innovative Companies Awards is Friday, September 5, at 11:59 p.m. PT. Apply today.
UPI
5 days ago
- Business
- UPI
UnitedHealth Group says it's cooperating with DOJ Medicare probe
Attorney General Pam Bondi speaks during a press briefing in June. UnitedHealth said its facing an investigation from the Department of Justice about its Medicare billing practices. Photo by Yuri Gripas/UPI | License Photo July 24 (UPI) -- UnitedHealth Group said Thursday it is facing Department of Justice investigations over its Medicare billing practices. UnitedHealth Group said in a statement on its website that it reached out to the DOJ after seeing media reports about investigations into its Medicare program. "(UnitedHealth) has now begun complying with formal criminal and civil requests from the Department. The Company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process," the statement said. The insurer said it's launching its own investigation. "To provide our stakeholders transparency and confidence (UnitedHealth) ... has proactively launched its own initiative to conduct third party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services." The company told CNBC that it expects to complete that review near the end of the third quarter. The Wall Street Journal reported in May that the Justice Department is conducting a criminal investigation into UHC for Medicare fraud. The company said it stands "by the integrity of our Medicare Advantage program." The Journal reported in July that the DOJ interviewed doctors about UnitedHealth's practices and asked if they felt pressured to submit claims for certain conditions that bolstered payments from the Medicare Advantage program. "(UnitedHealth) is committed to maintaining the integrity of its business practices and serving as reliable stewards of American tax dollars," UnitedHealth said. This is just the latest setback for the country's largest health insurer. Shares are down more than 42%, its CEO Andrew Witty left the company in May, it suffered a ransomware attack in early 2024, and then CEO Brian Thompson was killed in December 2024 by alleged shooter Luigi Mangione, which sparked significant public outrage against the company.
UPI
7 days ago
- Business
- UPI
U.S. sanctions Houthi petroleum smuggling network
The U.S. Treasury under Secretary Scott Bessent sanctioned two people and five companies on Tuesday on accusations of being a Houthi petroleum smuggling network. File Photo by Yuri Gripas/UPI | License Photo July 23 (UPI) -- The United States has blacklisted two Yemeni nationals and five companies on accusations of laundering money and importing petroleum products for the Houthi rebels. The Houthis, also known as Ansarallah, work with privately owned companies to ensure continued shipments of petroleum products into areas of Yemen under their control. On Tuesday, the U.S. Treasury sanctioned Muhammad Al-Sunaydar, 38, and three companies his connected to, as well as Yahya Mohammed Al Wazir, 44, and two of his companies, for facilitating those petroleum product transactions. "The Houthis collaborate with opportunistic businessmen to reap enormous profits from the importation of petroleum products and to enable the group's access to the international financial system," Deputy Secretary of the Treasury Michael Faulkender said in a statement. "These networks of shady businesses underpin the Houthis' terrorist machine, and Treasury will use all tools at its disposal to disrupt these schemes." The long proxy war between Iran and Israel exploded into the open on Oct. 7, 2023, when Hamas, another Iran-backed militia, attacked Israel. Israel responded by devastating the Palestinian enclave of Gaza. Since November 2023, the Houthis have enforced a maritime blockade of the Red Sea and the Gulf of Aden, attacking vessels, including U.S. military ships that transit the important trade route, in solidarity with the Palestinians, nearly 60,000 of whom have been killed by Israel. The United States, under both the Biden and Trump administrations, has been hammering the Houthis with sanctions, seeking to corrode their ability to make war, with President Donald Trump re-designating the Iran-proxy militia as a foreign terrorist organization in January. "The United States is committed to disrupting the Houthis' illicit revenue generation by maintaining pressure on the financial facilitators that fuel the Houthi enterprise," State Department spokesperson Tammy Bruce said in a statement. "Today's action builds on a series of measures targeting Houthi revenue generation and weapons procurement, reaffirming our resolve to counter terrorism, promote regional security and uphold freedom of navigation."
Straits Times
08-07-2025
- Politics
- Straits Times
FBI launches probes into former FBI director, ex-CIA director, Fox News reports
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: The Federal Bureau of Investigation seal is seen at FBI headquarters in Washington, U.S. June 14, 2018. REUTERS/Yuri Gripas/File Photo WASHINGTON - The FBI launched criminal probes into former CIA Director John Brennan and former FBI director James Comey, Fox News Digital reported on Tuesday, citing sources. These probes are over alleged wrongdoing related to past government investigations about claims of Russian interference in the 2016 U.S. elections in which President Donald Trump defeated former Secretary of State Hillary Clinton, the news report said. The FBI, the CIA and the Justice Department had no immediate comment. Reuters has not independently verified the probes. The scope of the criminal investigations into Brennan and Comey was unclear, the report added. A criminal investigation does not necessarily result in charges. Fox said its sources were from the Justice Department but did not specify the number of sources. A CIA review released last week found flaws in the production of a U.S. intelligence assessment that Russian President Vladimir Putin sought to sway the 2016 U.S. presidential vote to Trump, but it did not contest that conclusion. REUTERS Top stories Swipe. Select. Stay informed. Asia Why Japan and South Korea are on different paths in the latest US trade salvo Singapore NDP celebrations to be held at 5 heartland sites, including Bishan and Punggol, on Aug 10 Singapore Keep citizens at the centre of public service, Chan Chun Sing tells civil servants Singapore Man arrested for allegedly throwing bottle at SMRT bus, injuring passenger Asia As Trump plays tariffs hard ball, Asean has little choice but to play on Singapore Chuan Grove GLS site snags top bid of $703.6m from Sing Holdings-Sunway joint venture Asia PM Anwar called out by his own lawmakers as Malaysia's judicial crisis heats up Singapore SIA flight from Brisbane to Singapore diverted to Perth due to technical issue
IOL News
15-06-2025
- Business
- IOL News
South Africa: the World Bank's fattened lamb for slaughter
The hubris of dividing Africa along borders drawn on lunch break napkins, for no other reason than to cannibalise it, seemed eerily similar to the ways of the World Bank and the IMF today. Image: Yuri Gripas/Reuters/File LEE Camp of the programme Unredacted makes incisive observations about the dark manoeuvres of the 1884 Berlin Conference. The hubris of dividing Africa along borders drawn on lunch break napkins, for no other reason than to cannibalise it, seemed eerily similar to the ways of the World Bank and the IMF today. From the same actors, continuing with the same insidious plans of plundering the vast mineral resources of the African continent, these Bretton Woods contraptions, with innocuously sounding names, became the latter-day agents of the Berlin Conference conspirators. If wild hogs, for whatever sinister reason, were to conference on the neighbour's corn yard, Lee calls it the Orgy of Pillaging. In the Mandela and Mbeki successive administrations, the clarity of the vision and the determination of the resolve were unequivocal. It was to square the apartheid debts, grow the economy and bolster the fiscus, a strategy that yielded an average of 4.2% growth year on year. The way to trivialise the success of this strategy, notwithstanding its weaknesses in reducing joblessness, was to claim that the prices of commodities were favourably high. Were this trivialisation rooted in political sentiment only, it would be understandable. But it has no bearing on scientific fact or economic reality. And the Zuma administration was heralded into office with a bountiful surplus. And for purposes of context, commodity prices have been way higher since 2009, or at least the prices of those commodities on which the 'favourably high' claim is predicated. Yet to the collective shock of all citizens, they have helplessly witnessed a diminishing economic growth, recording a few recessions along the way. To date, the country has borrowed oodles of money, eye-watering and mouth-dropping amounts! The gross loan debt has increased from R2.5 trillion in 2017 to R4.3trln in 2021. This means the government has borrowed an additional R1.8trln from both domestic and international investors. The debt has been so heavy on the country's purse, so much so that the Treasury honchos have to borrow an estimated R2 billion every day to service the interest on capital borrowed and to keep the failing heart of their ICU patient ticking. The Government of National Unity (GNU) is determined to borrow as much money as it can possibly sustain their mind-numbing vaudeville. It would have been entertaining if it were not so tragic. The chronology of events is disturbing. First, the exchequer announced that the taxman had over-collected taxes in 2025, to great applause. Then the sequence of events and their timelines get blurred and indistinguishable. Either before that announcement or contemporaneous to it, the geniuses at the Treasury went to Washington DC to apply for a loan of R26bn. Or how does the Minister account for the speed of approval of this amount shortly after the Constitutional Court ruled against a planned VAT increase? But someone or something had to keep the masses entertained. And the famous stage is our Tower of Babel, the parliament of the people. And the captivating showdown of all, between the two main endearing partners of the GNU, is guaranteed front row television viewership. The masses were entertained with a VAT increase imbroglio. It was rejected. And the World Bank approved the loan, all in great effort to avoid imposing the beneficiation tax on a sliding scale. John Perkins, renowned author of Confessions of an Economic Hitman, has an insider articulation acuity. The World Bank and the IMF are frontline agents in the early stages of a regime change strategy. Beyond that stage, the creditors will take over the decision-making capabilities of the country or some government will be couped or someone will be swiftly murdered. For a country that boasts of the best constitution in the world, how does it account for the fact that its eminent provisions determining the powers of different branches of government are silent about the most egregious executive abuse of power? This is when the executive branch contracts into foreign debt on behalf of the state secretly, pledging the entire sovereignty of the people as collateral? It is not even helped by the fact that the preeminent conditionality for loans with the World Bank and the IMF is secrecy. Not even the representatives of the people convened in Parliament can know. It is very secret, they say. According to the late Minister of Public Enterprises, parliamentarians have to sign non-disclosure agreements. So much for voting. At least we now know what the term 'ruling elite' means. It refers to those people who have been given privileged sight of the loan terms of the World Bank and the IMF. Thomas Jefferson, from the vantage of his political heights, addressing his countrymen and countrywomen, once observed that banking institutions are more dangerous to our liberties than standing armies. And for a country led by the ANC, a political party with a long and profound history, spanning over a century of various political and economic stages of the forging of this country's nationhood, its incumbent leaders are determined not to learn anything about money or debt or even the mastery of their predecessors. It is a fairly documented epic of South Africa's complex historic narrative that the straw that broke the apartheid camel's back wasn't a straw. It was a crushing debt, and an irate mob of creditors beating at Darius Fourie's and Chris Stals' doors, Finance Minister and Reserve Bank Governor, respectively, who were at the service of the apartheid ignominy.
