The International Monetary Fund (IMF) has significantly downgraded its global economic growth forecast for 2025, projecting a slowdown to 2.8%, down from 3.3% in 2024. This revision marks the weakest global expansion since the COVID-19 pandemic and is primarily attributed to escalating trade tensions, particularly between the United States and China .
Key Highlights from the IMF’s April 2025 World Economic Outlook
U.S. Economic Impact: The U.S. economy is expected to grow by only 1.8% in 2025, a significant drop from 2.8% in 2024. This decline is largely due to the imposition of steep tariffs—some as high as 145%—by the U.S. under President Donald Trump’s administration, which have led to retaliatory measures from China, including tariffs up to 146% .
Global Trade Slowdown: Global trade growth is projected to decelerate to 1.7% in 2025, reflecting a substantial downward revision from earlier estimates. The IMF notes that the current trade environment is characterized by heightened uncertainty and protectionism, which are dampening investment and economic confidence .
Inflation and Policy Uncertainty: The IMF warns of increased inflationary pressures due to higher import costs stemming from tariffs. Additionally, the unpredictability of trade policies is contributing to a volatile economic landscape, with potential long-term implications for global financial stability .
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Emerging Markets and Developing Economies (EMDEs): These economies are particularly vulnerable to the current trade disruptions, facing challenges such as reduced access to international aid and unfavorable financial conditions. The IMF emphasizes the need for global cooperation to support these countries during this period of economic strain .
