The International Monetary Fund (IMF) has lowered its global growth forecast for 2025, citing the impact of recent US tariff policies under President Donald Trump.
According to its updated World Economic Outlook released during the IMF-World Bank Spring Meetings in Washington, global growth is now projected at 2.8%, down 0.5 percentage points from the January forecast. For 2026, growth is expected to rise slightly to 3.0%, still 0.3 points lower than earlier projections.
“We’re entering a new phase as the global economic framework of the past 80 years is being redefined,” said IMF Chief Economist Pierre-Olivier Gourinchas. He warned that rising trade tensions and uncertainty could further suppress global trade and economic growth.
The IMF report, finalized before the latest US tariff hikes on April 4, excludes the most recent measures—such as the new 145% tariffs on Chinese goods. Should these persist, the Fund cautions, global growth could slow further.
US Outlook Cools
The US economy is now expected to grow by just 1.8% in 2025—0.9 points lower than the January forecast. Growth is projected to ease further to 1.7% in 2026. The IMF attributes this slowdown to trade disputes, policy uncertainty, and weakening demand.
Inflation in the US is projected at 3.0% for 2025 and 2.5% in 2026. Globally, inflation is expected to reach 4.3% this year, tapering to 3.6% next year.
Top Trade Partners Suffer
America’s largest trading partners China, Mexico, and Canada are expected to take the biggest hits from the tariffs:
China’s growth is forecast to fall to 4.0% in 2025, down from 5.0% in 2024.
Mexico is now expected to contract by 0.3%, a sharp 1.7-point drop from earlier estimates.
Canada has also seen significant downward revisions in its growth outlook.
Japan will likely grow by just 0.6% in both 2025 and 2026.
European Outlook Weakens
The eurozone economy is projected to grow just 0.8% this year and 1.2% in 2026. Germany is expected to see zero growth, while forecasts for France, the UK, and Italy were also downgraded. One exception is Spain, with upgraded projections showing 2.5% growth in 2025, thanks to strong momentum from 2024.
The Middle East is expected to recover from disruptions in oil and shipping, though the outlook remains cautious due to ongoing conflicts. Meanwhile, sub-Saharan Africa is set for 3.8% growth this year, with a modest rebound expected in 2026.
