### IMF Warns of Election-Induced Uncertainty Amid Predictions for Soft Landing

The International Monetary Fund (IMF) has projected a relatively stable trajectory for the global economy through 2025, anticipating a "soft landing." However, the organization highlights a significant uncertainty tied to the upcoming elections across many nations, which could lead to critical changes in trade and fiscal policies.

The IMF brings attention to the potential impact of increased global tariffs, which could intensify trade tensions and disrupt supply chains. Such disruptions might limit the benefits of innovation and technology transfer, inhibiting medium-term growth, especially in emerging markets and developing economies.

In its latest World Economic Outlook report, the IMF estimates that global growth will slightly decrease to 3.2% in 2024 from 3.3% in 2023, holding steady at 3.2% into the next year. This forecast remains largely unchanged from earlier projections in the spring of 2024. Despite anticipated growth in the US and China and a rebound in Europe, newly elected governments could introduce significant policy shifts affecting these projections.

Donald Trump's potential return to the US presidency could reintroduce tariffs as a major component of economic policy. The IMF notes that these tariffs, essentially taxes on imports, could ultimately be passed down to consumers, raising costs.

On a more positive note, the IMF reports that global inflation is beginning to subside, largely due to central banks' higher interest rates. Core inflation, excluding food and energy prices, is expected to fall by 1.3% this year, following a slight decrease last year.

In the US, the IMF has revised its growth outlook upward by 0.2% for 2024, predicting a 2.8% rise due to significant wage increases and strong consumer spending. However, it expects this growth to slow to 2.2% by the next year as the job market cools and spending dips. This outlook is slightly more optimistic than the Federal Reserve's forecast of 2% growth.

Europe is forecasted to experience growth rising to 0.8% this year and 1.2% next year, supported by stronger domestic demand. Conversely, China's growth is expected to slow gradually, though better-than-expected exports could help its GDP reach 4.8% this year, 0.2% higher than previously thought.

Despite some positive signs, the IMF warns of several risks that could hamper global growth, including further declines in China's property sector, commodity price spikes due to climate shocks or geopolitical tensions, and regional conflicts.

Looking forward, the IMF anticipates that global economic growth will remain modest, decelerating from 3.3% in 2023 to 3.1% by 2029. The enduring challenges include aging populations, weak investment, and historically low productivity growth. The five-year forecasts for many advanced and emerging economies indicate persistent headwinds.

The IMF urges nations to address fiscal imbalances, as fiscal deficits and government debt remain elevated post-pandemic, with rising debt service costs in many countries. For the US, the fiscal deficit is expected to be marginally reduced to about 6.1% by 2029, but public debt is projected to reach nearly 134% of GDP under current policies. In contrast, the euro area's debt-to-GDP ratio is expected to stabilize around 88% by 2024, though variations exist across countries.