The International Monetary Fund (IMF) has revised its global growth forecast for 2025 down to 2.8%, a sharp drop from the 3.3% estimate made in January. The downgrade, outlined in the IMF’s April 2025 World Economic Outlook (WEO), attributes the slowdown largely to rising trade tensions and heightened policy uncertainty.
A major factor behind the revision is the United States’ recent imposition of sweeping new tariffs, followed by retaliatory measures from trading partners. These moves have disrupted global supply chains and weakened investor confidence.
“Since January, a series of tariff announcements—culminating in near-universal U.S. tariffs on April 2—have pushed global tariff rates to levels not seen in a century,” the IMF report stated. “This constitutes a major negative shock to growth. The unpredictability surrounding these measures further undermines economic activity and complicates projections.”
Advanced economies are expected to see growth slow to 1.4% in 2025, with the U.S. economy revised down to 1.8%—nearly a full percentage point below earlier forecasts.
Growth in emerging markets and developing economies is also expected to decline, with projections of 3.7% in 2025 and 3.9% in 2026. Countries heavily affected by recent trade measures, such as China, face particularly steep downgrades.
The IMF warned of growing downside risks, including the threat of an intensified trade war, financial instability, and limited policy space to respond. Vulnerable emerging markets could face capital outflows, currency depreciation, and rising debt pressures.
However, the Fund noted that a rollback or easing of current trade policies could help stabilize the outlook and support a rebound in global growth.
Source: Thepressradio.com
