The International Monetary Fund (IMF) reports that inflation trends are diverging globally, with companies in the United States and other countries that have raised tariffs largely absorbing higher costs. Meanwhile, demand has remained subdued in major exporting economies such as China, according to IMF spokesperson Julie Kozack.

She stated: “The International Monetary Fund sees a mixed inflation picture globally as companies in the US and other tariff-raising countries have so far absorbed much of the higher duties, while demand remains suppressed in major exporting countries like China.” Kozack added that the global economy has demonstrated resilience amid tariff-related uncertainties as the IMF and World Bank Group prepare for their annual meetings in Washington this month.

Kozack noted that while global growth held steady during the first half of the year, recent indicators point to a potential slowdown. She said: “We see global growth in the first half of the year having held steady, but we are starting to see signs of a slowdown globally now,” and added, “With respect to inflation, what we see globally is a bit of a mixed picture.”

According to Kozack, core inflation in the US has been pushed up by some tariff-related price increases, but headline inflation is rising faster in Britain, Australia, and India.

FIRMS ABSORB TARIFF COSTS AND FUTURE OUTLOOK REMAINS UNCERTAIN

Kozack said that US firms have been absorbing some of the tariff impact, contributing to the relatively limited effect on inflation in the US so far. However, she warned about the uncertain duration of this effect, stating, “How long that will last, I think, is a question.” The IMF plans to discuss these issues further in its upcoming World Economic Outlook on October 14 and in the US economic policy review in November.

Kozack commented that the Federal Reserve’s decision to lower its policy interest rate in September was appropriate due to a softening labor market and inflation moving toward the Fed’s target.

On the partial US government shutdown that began Wednesday, Kozack said the IMF was monitoring developments and still formulating its assessment. She added, “That impact will depend very much on the duration of the shutdown and the modalities of the shutdown, and we certainly hope that a compromise can be found to ensure that the federal government remains fully funded.”

– Ends

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