Global Growth To Slow As A Result Of Trump's Tariffs, Says Imf

In a downbeat World Economic Outlook, the IMF has projected that global growth will drop to 2.8 in 2025 and 3 in 2026 due to the announcement of "a series of new tariff measures by the United States and countermeasures by its trading partners."

"Following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through 2024 and was projected to remain so in the January 2025 World Economic Outlook WEO Update. However, the landscape has changed as governments around the world reorder policy priorities. Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariffs on April 2 and bringing effective tariff rates to levels not seen 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 Fund said.

The projections represent a downward shift from the 3.3 projected for both years in its January 2025 World Economic Outlook.

The Fund said that tariffs on their own would represent a "major negative shock to growth", but added that "the unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions."

Given the complexity and fluidity of the current moment, this report presents a "reference forecast" based on information available as of April 4, 2025 including the April 2 tariffs and initial responses, "in lieu of the usual baseline," the Fund said.