The International Monetary Fund said Tuesday that the global economy is on pace for a soft landing this year and 2025 but elections around the world introduce a "high" level of uncertainty to that outlook due to potential changes in trade and fiscal policy.

The IMF said an increase in global tariffs could exacerbate trade tensions, disrupt global supply chains, and weigh down medium-term growth prospects by limiting positive spillovers from innovation and technology transfer that once fueled growth in emerging markets and developing economies.

"The level of uncertainty surrounding the outlook is high," according to the IMF. "Newly elected governments (about half of the world population has gone or will go to the polls in 2024) could introduce significant shifts in trade and fiscal policy."

In the US, tariffs are a key part of Donald Trump's agenda should he be elected president in November. Tariffs are taxes that are paid by importers at points of entry, with the additional costs levied on these companies often passed on to consumers.

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The IMF estimates in its new World Economic Outlook report that global growth will tick down to 3.2% in 2024 from 3.3% in 2023 and hold at 3.2% next year. The outlook is nearly unchanged from the spring of 2024.

Growth is projected to be higher than previously thought in the US and China this year while Europe also recovers. The IMF noted that global inflation is retreating, largely thanks to the effects of higher interest rates imposed by central banks.

Global inflation is expected to decrease this year and next due to a broad-based decline in core inflation, which excludes volatile food and energy prices. Core inflation is expected to drop by 1.3% this year, following a 0.1 percentage point drop last year.

The IMF raised its outlook for the US economy by 0.2% in 2024 due to strong increases in wages and robust consumer spending, resulting in growth of 2.8% for the year.

But the IMF expects growth in the US to slow to 2.2% next year as the job market cools and consumers slow spending. That’s slightly more optimistic than the Federal Reserve’s forecast for growth of 2% next year.

In Europe, the IMF sees growth picking up this year to 0.8%, before rising a bit more by 1.2% next year, helped by stronger domestic demand.

China’s economy — weighed down by property weaknesses and languishing consumer confidence — is projected to see a gradual slowdown. Better-than-expected exports are predicted to fuel GDP of 4.8% this year, 0.2% higher than previously forecast.