The IMF's latest World Economic Outlook (July 2025) report pointed out that despite multiple uncertainties such as tariff disputes, inflationary pressures, fiscal deficits, and geopolitical risks, economic growth forecasts for 2025 have been unexpectedly raised. The global economy appears to be "resilient", but this resilience actually comes from short-term policy operations and structural distortions, and its future sustainability is still questionable. In this complex global context, China, as one of the major economies, has also been placed in a more prominent role.

Behind the increase in growth: the temporary dividends of tariff games and financial easing.

In this report, the International Monetary Fund raised its global economic growth forecast for 2025 to 3.0%, up from the 2.8% forecast in April, and expects further growth to 3.1% in 2026. This should be an encouraging indicator, but this 'report card' is inseparable from the short-term effects of a series of human interventions. The most critical variable is tariff policy. From July 27, China and the United States launched the third tariff negotiations in Stockholm, Sweden, and the two sides decided to extend the 'current suspension of tariffs' for another 90 days. Other economies such as Japan and South Korea reached a temporary easing agreement with the United States after tariff negotiations and postponed the deadline for further tax increases to August 1. This 'respite period' prompted enterprises and consumers to accelerate import and export operations, setting off a round of 'grabbing imports' effect, and promoting a brief jump in trade volume and enterprise investment. At the same time, the 'Big and Beautiful Act' passed by the United States has provided businesses with a large amount of tax incentives and fiscal spending, further stimulating economic growth. The strong rebound in U.S. stocks, the depreciation of the U.S. dollar, and the increase in capital inflows into emerging markets have collectively created an 'unexpectedly loose' financial environment, giving global markets signs of prosperity.

Superficial prosperity: the real structure is quietly out of balance.

However, the IMF reminds that the apparent prosperity of the global economy hides deep distortions and risks. For example, real GDP in the United States fell in the first quarter of 2025 at an annualised rate of -0.5%, weak private consumption, and unusually strong trade and corporate investment, reflecting that economic activity is too dependent on pre-emptive effects rather than endogenous drivers. Economic growth in the eurozone has accelerated to 2.5% on the surface, but excluding the historic sharp increase in Ireland's pharmaceutical exports to the United States, it has grown by only 1.4% in real terms. In Japan, private consumption and net exports continued to be sluggish, with economic growth depreciating at an annualised rate of -0.2%. In terms of global inflation, the United States is facing new imported inflationary pressures, while the eurozone is in a deep downturn, and the risk of deflation cannot be ignored. It is worth noting that although China achieved an annualised GDP growth rate of 6.0%, partly due to the depreciation of the renminbi and fiscal stimulus, domestic demand has not yet fully recovered, reflecting the endogenous weakness in the process of economic structural transformation.

Foggy outlook: downside risks still dominate.

This issue of the World Economic Outlook once again emphasises that the main risks to the future economic outlook remain downward. These risks mainly come from four aspects: The first is the uncertainty of trade policy. If by 1 August, tariff rates are reset to the level announced on 2 April or higher, and copper is subject to tariffs of up to 50% currently announced, global growth will fall by about 0.2 percentage points in 2025. Second, geopolitical risks. Further conflicts in the Middle East and the war in Ukraine could disrupt global supply chains and push up energy and raw material prices. Third, fiscal deficits and financial vulnerabilities. The high fiscal deficits of many developed countries, represented by the United States, may push up term premiums and trigger a new round of global financial contraction if they eventually lead to a loss of confidence in their fiscal sustainability. Fourth, inventory mismatch and demand decline. If the high inventory formed by "grabbing imports" in the first half of the year cannot be digested in the second half of the year, it will lead to enterprises facing the double blow of rising inventory costs and plummeting orders.

China's role: Seeking progress in stability in global turmoil.

In this round of global economic adjustment, China is one of the few major economies to achieve a significant upward revision of growth expectations. The International Monetary Fund raised China's GDP growth forecast for 2025 sharply to 4.8% from 4.0% in April, the highest increase of 0.8 percentage points among all major economies. The growth forecast for 2026 was also raised to 4.2%, reflecting China's better-than-expected economic activity in the first half of the year. The key to this growth is the strong performance of external exports and the changing monetary policy environment. The IMF pointed out that China's economic growth is mainly driven by exports, with the depreciation of the renminbi increasing export competitiveness, while exports to other markets around the world are more than offsetting the decline in exports to the US market. This also shows the effectiveness of China's flexibility in adjusting its foreign trade structure and market diversification strategy. At the same time, government financial measures have formed a certain support for domestic consumption. It is worth noting that China's current inflation level remains moderate. The IMF expects core inflation to be only 0.5% in 2025, the lowest among major economies. This gives China room to take monetary easing measures if necessary and gives it more policy flexibility. Despite the impressive short-term growth data, the IMF has not ignored the risks. The report suggests that the current strong performance partly reflects the export front-end effect caused by global tariff policy uncertainty, which may be difficult to sustain in the coming quarters.

Policy options: Cooperation and reform remain the only way out.

The IMF emphasizes that if countries want to truly break through the current growth dilemma, they must promote international cooperation and domestic structural reforms concurrently. First, a stable, transparent and predictable trade policy framework should be established as soon as possible. In the current limited multilateral system, pragmatic regional agreements, bilateral agreements, and rule innovations covering digital services and investment may pave a pragmatic path to easing trade tensions and restoring confidence. Especially in the context of the continuous reshaping of the tripolar relationship between the United States, China and Europe, and the rise of protectionism, any form of institutional agreement will become the cornerstone of market stability. At the same time, fiscal consolidation is urgent. The report calls on countries to gradually restore fiscal discipline and build a medium-term fiscally sustainable path while continuing to meet key livelihood and infrastructure spending. Especially for developing countries with limited fiscal space, we should avoid path dependence on short-term deficit stimulus and instead achieve steady growth by improving tax efficiency, controlling unproductive spending, and attracting private investment. In particular, the IMF emphasizes that any fiscal intervention in response to trade shocks should have clear time limits and exit mechanisms to avoid becoming a permanent burden.

In terms of monetary policy, the IMF believes that central banks must maintain policy independence and flexibility in the face of trade frictions, exchange rate fluctuations and imported inflation. The imposition of tariffs is not only a trade measure, but also a supply shock, which will be transmitted to prices and expectations, which will challenge the central bank's interest rate decisions. At a time when inflation has not yet stabilised in some countries, hasty easing may exacerbate price increases, while in other economies with weak demand, moderate rate cuts can have a stabilising effect. Therefore, monetary policy cannot be "one-size-fits-all", but must be dynamically adjusted according to local conditions. More importantly, the IMF reiterated that only through deep structural reforms can the global economy move away from the repeated pull of short-term stimulus and external shocks and move towards truly sustainable growth. This includes promoting institutional change in key areas such as education, labour market, technological innovation, business environment, and green transformation. Especially at a time when digitalisation and artificial intelligence are accelerating, whether countries can improve labour productivity and enhance innovation capabilities will determine their position in the new round of global competition. The global economy will not collapse in 2025, and it will even perform well in some data. But as the IMF's title suggests, "weak resilience in the face of persistent uncertainty," the foundation for global growth is not solid. When monetary easing and temporary policy incentives fade and structural distortions surface, whether countries can get out of the quagmire of short-term thinking and regain their commitment to long-term reforms and international cooperation will determine the future direction of the world economy.

This article is reprinted from the United Nations News Network, article address：【专题报道】脆韧之间：2025年全球经济的迷雾与路径 | | 1联合国新闻 (un.org)