Pierre-Olivier Gourinchas: Global Outlook 'Fragile' Amid Trade Tensions, AI Boom

The IMF’s latest World Economic Outlook (October 2025) warns that the global economy faces a “tariff shock,” with trade tensions dimming already fragile growth prospects. Global GDP growth is now projected at 3.2% in 2025 and 3.1% in 2026, while inflation remains persistently above target. IMF Chief Economist Pierre-Olivier Gourinchas says the impact of US-led tariffs has been modest so far due to exemptions, fiscal support, and resilient private sector responses. However, risks remain from escalating trade frictions, China’s weak property market, and an AI-driven investment boom that could overheat markets, inviting tighter monetary conditions ahead.