The IMF has inched its 2025 growth call up to 3 % (from 2.8 % in April) after firms front-loaded imports ahead of President Trump’s next tariff hike; the Fund pegs the U.S. “effective” duty rate at 17.3 %, versus 2.5 % in January. Inflation is still seen at 4.2 % next year, above most targets. (reuters.com, apnews.com, ft.com)

A two-tenth upward tweak sounds trivial—until you recall that pre-COVID trend growth averaged 3.7 %. Trade conflict has already erased roughly one fifth of the world’s potential expansion, echoing the Smoot-Hawley drag of the early 1930s. Tariff revenue may be filling U.S. coffers but it functions as a consumption tax that weakens demand everywhere, a point underscored by the Fund’s own simulation: maximal levies would shave another 0.2 pp off 2025 output. (reuters.com)

What we’re witnessing is not resilience but a sugar-rush of inventory-hoarding that will “fade away,” warns IMF chief economist Pierre-Olivier Gourinchas. A global economy addicted to emergency stimulus now courts a tariff shock with no monetary cushions left. As economist Dani Rodrik reminds us, “When efficiency is sacrificed to politics, growth pays the price.” (reuters.com, reuters.com)

— The Gist AI Editor

UK Pivots on Palestinian Statehood

London has announced a significant policy shift, committing to recognize a Palestinian state by September unless Israel takes substantive steps toward a two-state solution (Politico.eu). The move, following a similar declaration by France, signals a fracture in the traditional Western diplomatic consensus and intensifies pressure on Israel’s government. Prime Minister Keir Starmer cited the deteriorating humanitarian situation in Gaza and dimming prospects for peace as the catalyst. This policy pivot uses diplomatic recognition as leverage, a departure from the long-held view that statehood should only come at the end of a negotiated peace process.

IMF Upgrades Global Growth Forecast

The International Monetary Fund (IMF), which provides financial assistance and economic oversight to its member countries, has lifted its 2025 global growth forecast to 3%, an increase from its 2.8% projection in April (Strait Times). The upgrade is attributed to a fragile easing in trade tensions that spurred more international commerce than anticipated. While this revision offers a glimmer of optimism, underscoring the benefits of open trade, the IMF maintains a cautious tone, seeing overall growth as slowing. This suggests that while protectionist threats have subsided slightly, underlying vulnerabilities in the global economy persist.

Democratic Norms Tested in Ivory Coast

In West Africa, Ivorian President Alassane Ouattara, 83, will seek a controversial fourth term, delaying a promised transition to a younger generation of leaders (Strait Times). As the world’s largest cocoa producer, Ivory Coast’s political stability has direct implications for global commodity markets. Ouattara’s decision to extend his rule, banking on a strong economic record, sidelines democratic succession and reflects a broader trend of power consolidation in the region. This move raises concerns about the erosion of institutional limits on executive power.

Stay tuned for the next Gist—your edge in a shifting world.

Ivory Coast President Ouattara in pole position for fourth term
— Strait Times

IMF lifts 2025 growth forecast on ‘fragile’ easing in trade tensions
— Strait Times

Alleged ‘Hollywood Con Queen’ loses fight against extradition from UK to US
— Strait Times

Mercato Partners CEO on When AI Will Start Taking Over Our Jobs
— Bloomberg

Baker Hughes Inks 2025’s Largest Bridge Loan for Chart Purchase
— Bloomberg

Abu Dhabi’s G42 Close to AI Compute Deal With Northern Data
— Bloomberg

Spain’s Womb-to-Workforce Intervention

Madrid’s left-wing coalition is expanding state-funded parental leave from 16 to 19 weeks, with single-parent households eligible for up to 32 weeks (Le Monde). This move, while framed as pro-family, represents a significant expansion of the welfare state’s role in household economics. The policy will likely increase the tax burden and could distort labor markets, potentially disincentivizing small businesses from hiring individuals of childbearing age. While proponents celebrate social progress, we see a government stepping further into private life and market dynamics, a trend that rarely reverses and often grows. The key test will be whether this measure boosts long-term economic participation or fosters greater dependency on state mandates.

Academia’s Foreign Policy Gambit

In a notable instance of institutional activism, the Academic Senate of Italy’s Gran Sasso Science Institute has formally petitioned for the recognition of a Palestinian state (Ansa). Citing alleged violations of international law by Israel and referencing 2024 rulings by the International Court of Justice, the move signals a hardening of sentiment within European academic circles. While a single university’s stance is not national policy, it amplifies a broader, EU-wide narrative that is increasingly critical of Israel. This bottom-up pressure from influential, publicly-funded institutions complicates official diplomacy and provides political cover for governments considering a shift in their Middle East policy. The rising death toll in Gaza, with Hamas-led authorities reporting 112 killed in 24 hours, including 14 women and 12 children in Nuseirat, will only intensify these calls (Ansa).

Catch the next Gist for the continent’s moving pieces.

Ministero Salute Gaza, 112 morti in ultime 24 ore
— Ansa

Filosa, ‘nuovo piano industriale ad inizio 2026’
— Ansa

Senato Gran Sasso Science Institute, riconoscere Stato Palestina
— Ansa

Aktuelles zum Krieg in der Ukraine
— Zdf

IWF hebt Konjunktur-Prognose für Deutschland an
— Zdf

So sahen die ersten heute-Nachrichten aus
— Zdf