IMF Says US-China Dialogue Could Boost Global Economy Amid Rising Oil and Inflation Pressures
The International Monetary Fund (IMF) has welcomed recent high-level discussions between U.S. President Donald Trump and Chinese President Xi Jinping, describing the renewed engagement between the world’s two largest economies as a positive signal for global stability. According to the IMF, easing tensions between both nations could help reduce uncertainty in international markets and strengthen global economic performance.
Speaking at a news briefing, IMF spokesperson Julie Kozack emphasized the importance of cooperation at the highest level between Washington and Beijing. She noted that the organization “certainly welcomes” the constructive dialogue, adding that anything that helps reduce trade friction is beneficial not only to both countries but also to the wider global economy.
However, Kozack also warned that broader global risks remain elevated. She pointed to ongoing geopolitical pressures in the Middle East, including disruptions linked to Iran’s closure of the Strait of Hormuz, which has contributed to crude oil prices staying above $100 per barrel. These developments, she said, are pushing the global economy closer to a more challenging growth outlook outlined in the IMF’s recent forecasts.
Under the IMF’s “adverse scenario,” global growth could slow to 2.5% this year, compared to a more optimistic projection of 3.1%, assuming a rapid easing of global tensions. The scenario also factors in sustained high oil prices, tighter financial conditions, and rising inflation expectations, all of which could weigh heavily on economic recovery.
Despite these risks, the IMF maintained that medium-term inflation expectations remain well anchored, and global financial conditions are still relatively accommodative. The institution also confirmed ongoing discussions about possible financial support for countries struggling with rising energy and commodity costs, though it declined to name specific nations involved.
source: newtelegraph