The International Monetary Fund (IMF) has revised its global economic growth forecast for 2025, attributing the downgrade to the escalating trade tensions stemming from U.S. tariffs.
Key Forecast Revisions:
- Global Growth: The IMF has reduced its global growth projection for 2025 to 2.8%, down from 3.3% in 2024.
- United States: The U.S. growth forecast has been lowered to 1.8% for 2025, a significant decline from 2.8% in 2024.
- China: China’s growth projection has been cut to 4% for both 2025 and 2026, reflecting the impact of trade disruptions.
Contributing Factors:
- Trade Tensions: The IMF highlights that the U.S. has imposed tariffs on imports, some reaching as high as 145%, affecting trade globally.
- Inflation: The IMF anticipates that inflation will decline more slowly than previously expected, with notable increases in the U.S. and other advanced economies.
Regional Impacts:
- Euro Area: Growth in the Euro area is expected to slow, particularly in Germany, though Spain remains a positive outlier.
- Mexico: Mexico’s growth forecast has been significantly downgraded, reflecting the broader regional impacts of trade tensions.
Outlook:
The IMF warns that continued trade conflicts could further dampen economic activity, increase financial market volatility, and tighten financial conditions. Medium-term global growth remains sluggish without structural reforms, with forecast averages below historical norms.
For more detailed information, refer to the IMF’s World Economic Outlook, April 2025.
The International Monetary Fund Hq 2 DC on Wikimedia by AgnosticPreachersKid
