This week the IMF released an update to its World Economic Outlook, titled “Global Economy: Steady amid Divergent Forces” and, seriously, in what fricking world are they living? It was yet another example of international groups, governments and parts of the media sane-washing the utter crisis we all exist in because Donald Trump is an egomaniacal bully with the impulses of a spoiled toddler.
How’s this for timing: on Sunday Donald Trump announced from 1 February he will levy a 10% tariff “on any and all goods sent to the United States” from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland, and will increase it to 25% from 1 June unless they let the US gain control of Greenland.
The next day the IMF released a report in which it noted that since October 2025 “trade tensions have continued to abate but remain subject to occasional flare-ups”.
Flare-ups? Cripes. I guess the IMF could not write “the madman in the White House hasn’t done anything lately, but you know he probably will because he is deranged and could for example decide that he deserves Greenland because Norway didn’t give him the Nobel peace prize.”
No one writes or says that. Everyone fudges around trying hard to suggest things are normal. Americans being killed by roving gangs of government-sanctioned thugs and Trump threatening to invoke the Insurrection Act is just worthy of a straight report. Heck, Donald Trump posting a photo of himself sitting before a map showing the US flag on Venezuela, Canada and Greenland is just Trump being Trump – a bit provocative, or even just “trolling”.
Give me strength.
When did everyone become so utterly committed to ensuring gross acts of violence and betrayal of international laws would be prettied up for easy consumption?
Consider that the IMF’s update showed this chart of the effective rate of tariffs that shows the average tariffs paid by Americans on all imports is higher than the IMF projected in October.
They describe it all in very calm language, stripped of any emotion or understanding: “the overall US effective tariff rate at about the same level as assumed in the October 2025 WEO, but the changes for specific countries can be meaningful”.
“Meaningful”?
The tariffs Americans are paying now are more than six times higher than this time last year, and they are set to go even higher. But sure, “meaningful”.
It’s all so maddening.
The IMF has decided that yes, tariffs are bad, but hey have you seen all that investment in AI?
I noted previously that the more recent GDP figures showed Australia is also having a boom in AI investment:
The IMF has clearly hitched its wagon to AI as being the driver of economic growth for the future.
The report suggests that “on the upside, rapid adoption of AI, possibly facilitated by the ongoing surge in AI-related investment in both hard and soft infrastructure, could significantly improve productivity and boost medium-term growth prospects sooner rather than later.”
I mean, yeah, it could. It also could, as the IMF notes “fail to deliver earnings commensurate with their lofty valuations, and investor sentiment could sour”. The upshot of that is it could lead to “triggering a costly reallocation of capital and labor … and a more significant correction in equity markets, global output losses could increase further”.
That is: a global recession.
What about energy concerns? No worries, so long as governments enact “complementary policies to contain the potential impact on energy prices” and “scale up the necessary critical intermediate inputs, and labour market programs to manage workforce transitions are in place”.
But other than those small hurdles …
The IMF’s report makes no mention of Greenland, or Venezuela, or even Trump. Everything that defiles the pretence that normality continues is scrubbed away.
And normality has left the room, the building, and was last seen driving 160km/h towards the edge of the Grand Canyon.
This week, Trump invited countries around the world to join his personal UN, “board of peace” and put a price of $1bn to become a permanent member.
Yep, $1bn to sit at a table with Tony Blair and Jared Kushner. When French President Macron said, Yeah nah, Trump offhandedly threatened a 200% tariff on French wine. A totally normal thing to say or do, and very much a case of “steady amid divergent forces”.
Ignore the mad man in the middle of the room, let’s just focus on the projections of global growth that are good if we assume normality.
Scrub away kidnapping of a national leader because Trump wants to get oil, ignore that Trump two weeks ago withdrew the US from 66 international organisations including the “International Institute for Justice and the Rule of Law”, and the “UN Conference on Trade and Development” and the “International Trade Centre”.
Ignore that and instead write, “against this backdrop of stabilising trade tensions and supportive financial conditions, the global economy has continued to be remarkably resilient, adapting to the shifting landscape and with momentum varying across countries and sectors.”
The IMF wants to pretend all is calm and nice; it is not. This pretence just gives Trump more permission to smash everything and anything that takes his fancy.
Greg Jericho is a Guardian columnist and chief economist at the Australia Institute
