S. tariff measures. As these effects faded, investment in the leading economies weakened, while consumption remained low.
Geo-economic fragmentation and protectionist industrial policies
Protectionist and interventionist industrial policies are a central issue in the IMF's forecasts. About half of the G20 emerging markets, including Brazil, Indonesia and Saudi Arabia, as well as two G20 advanced economies, Canada and the United States, introduced new industrial policies last year. These measures, many of which distort trade, contribute to increased geo-economic fragmentation and instability of external balances.
Demographic pressure and budget tensions in the G20 countries
Developed countries are facing increasing demographic obstacles, including an increasing proportion of elderly dependents and a shrinking working-age population, limiting potential output and increasing pressure on public finances.
Fiscal consolidation is becoming an increasingly difficult task. It is becoming more difficult to stabilize debt as the costs associated with an aging population increase and the number of taxable people decreases. Inflation is expected to fall to 3.5 percent in 2025, but production gaps persist and spending continues to shift, especially towards healthcare and defense.
External imbalances increased in 2024, while income inequality remains elevated in several countries. The IMF warned that the change in trade policy and the expansion of industrial policy make the external environment "extremely uncertain."
Structural reform priorities: different paths for advanced and emerging economies
The IMF emphasizes that the priorities of structural reforms vary greatly. In advanced economies, reforms with the greatest impact
