Global economic growth will slow to 2.8 per cent this year, from 3.3 per cent last year and significantly below the historical average, the IMF forecast in its World Economic Outlook.
The slowdown expected in the United States is even steeper, with its economy likely to grow only 1.8 per cent in 2025, compared with a 2.8 per cent expansion in 2024.
Both predictions are more pessimistic than the fund’s January projections, which came before Trump’s flurry of tariff announcements took America’s average import tax to its highest level in a century.
“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” the Washington, DC-based institution said.
And risks to the global economy are “firmly tilted to the downside,” it added.
Trump’s new tariffs account for almost half of the sharp downgrade in the IMF’s US growth forecast for this year, Pierre-Olivier Gourinchas, the IMF’s chief economist, wrote in a blog post, noting that uncertainty over policy dented demand in the US even before the recent tariff announcements.
North America, just like all regions, can’t expect any upside from the tariffs further down the line.
“The long-term impact of the tariffs, if they are maintained, (will be) negative for all regions, just like the short-term impacts,” Gourinchas told reporters on Tuesday.
The latest World Economic Outlook was put together under “exceptional” circumstances, the IMF said.
Trump’s April 2 unveiling of sweeping tariffs “forced us to jettison our projections — nearly finalised at that point,” it wrote.
Underscoring the importance of trade to the economic outlook, the IMF said a ratcheting up of trade tensions, along with even more questions about where trade policies are headed, could further reduce growth, whereas “de-escalation from current tariff rates and new agreements providing clarity and stability in trade policies” could do the opposite.
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