Macroeconomic development
According to the International Monetary Fund (IMF), the global economy is proving to be somewhat more resilient than had been assumed in April 2025 (World Economic Outlook, April and July 2025) – despite trade tensions and political uncertainty. This can largely be attributed to pauses announced in the US tariff dispute and initial trade agreements. Moreover, the economic data for the first quarter was significantly stronger than previously anticipated. In view of the continuing uncertainty, however, the global economy’s resilience remains fragile. The most recent tariff agreement between the EU and the USA was not included in the IMF report.
The IMF’s economists stressed that global trade had accelerated in the short term. Prior to the USA’s introduction of tariffs with almost all of its trading partners announced in early April, the volume of trade increased – for example, deliveries of medicines from Ireland to the USA were exceptionally high. In addition, the tariffs actually levied are, on average, lower than originally announced by President Trump.
In China, the slowdown in economic growth in the second quarter of 2025 was less pronounced than expected. Having expanded by 5.4 % in the first quarter, the Chinese economy grew by 5.2 % in the second quarter. The world’s second-largest economy thus demonstrated its resilience to the US tariffs. Economic measures and the front-loading of shipments by Chinese factories have so far managed to prevent a more severe economic slowdown.
Buoyed by the strong growth of Ireland’s gross domestic product, there are increasing signs of an economic recovery in the eurozone.
By contrast, the IMF reported that growth prospects for Germany have improved slightly, after economic stagnation had been forecast in April. Nevertheless, the German economy – as anticipated by experts – contracted by 0.1 % in the second quarter of 2025 compared with the previous quarter. There had been slight economic growth of 0.3 % in the first three months of the year. Between January and May 2025, exports increased by 0.2 % year-on-year, while imports rose by 4.6 %.