The International Monetary Fund (IMF) on Tuesday lowered its global economic growth forecast for 2025 to 2.8 per cent.
Predicting the wave of tariffs and uncertainty unleashed by U.S. President Donald Trump will lead to a worldwide economic slowdown.
The IMF revised its projection of 3.3 per cent forecast in January.
Global growth for 2026 was projected to drop to 3 per cent, also down from 3.3 per cent.
IMF economic counsellor Pierre-Olivier Gourinchas said the world economy was being severely tested following the new tariffs announced by Trump.
The IMF noted that its April forecast was “put together under exceptional circumstances,
“ Citing Trump’s announcement on April 2 that the U.S. was imposing blanket tariffs of 10 per cent on nearly all trading partners, plus additional levies for a host of countries.
While the higher tariffs have been suspended for 90 days to allow for trade negotiations, the policy caused the IMF expert “to jettison our projections,” Gourinchas said.
“While many of the scheduled tariff increases are on hold for now, the combination of measures and countermeasures has hiked U.S. and global tariff rates to centennial highs.”
The global economy proved surprisingly resilient during the shocks of the last four years including a period of global high inflation linked to energy prices and “the war in Ukraine and still bears significant scars,” the IMF said.
Now, inflation could rise again amid the trade tensions, while the uncertainty surrounding them was weighing on growth, it said. (dpa/NAN)
