Summary
- Due to the tariff impact of the Donald Trump administration, global economic pessimism is spreading, with the Brookings Institution reporting that the 'Tracking Indexes for the Global Economic Recovery' has declined for two consecutive months.
- The global confidence index has fallen for three consecutive months, highlighting a decline in business and consumer confidence, while the financial index also showed a downward trend.
- The 'collapse of global trade and increased policy uncertainty' is expected to suppress economic growth rates, with the IMF also preparing to lower its growth forecast.
Spread of Economic Recovery Pessimism
IMF Likely to Lower Growth Forecast
Pessimism about the global economy is spreading due to the tariff impact of the Donald Trump U.S. administration.
According to the 'Tracking Indexes for the Global Economic Recovery' (TIGER index), jointly released by the Brookings Institution and the Financial Times (FT) on the 20th (local time), the index this month was 5.95, falling for two consecutive months since February this year (7.71). This index comprehensively assesses global economic recovery by combining various economic and financial indicators and confidence indexes. The baseline is 0, and a higher index means the economy is better compared to long-term trends, while a lower index means the economy is worse.
In particular, the global confidence index, which reflects business and consumer confidence, fell for three consecutive months to -1.044. The financial index, which includes credit growth, market capitalization, and stock indexes, also fell for two consecutive months to 7.144. Although the U.S. had decent production and employment indicators until the first quarter, the atmosphere changed after President Trump's reciprocal tariff announcement on the 2nd. Eswar Prasad, a senior fellow at the Brookings Institution, said, "It is premature to predict a global recession now," but added, "The collapse of global trade and increased policy uncertainty will certainly suppress economic growth rates."
This data was released ahead of the International Monetary Fund (IMF) and World Bank (WB) Spring Meetings held in Washington, D.C., from the 21st to the 26th. On the 22nd, the IMF will release its global economic outlook. In its January forecast, it projected global economic growth rates of 3.3% for this year and next, and a U.S. economic growth rate of 2.7% for this year. Kristalina Georgieva, the IMF Managing Director, stated on the 17th, "Financial market volatility has increased, and trade policy uncertainty has literally gone beyond limits," indicating that a downward revision of the growth forecast is being prepared.
Bloomberg Economics pointed out, "No matter how much the IMF lowers its growth forecast, past cases suggest that the final impact is likely to be greater."
Han Kyung-jae, hankyung@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
