Reduced forecasted growth in 2025, according to IMF
Updated IMF Predictions for the Global Economy
Scoop: The International Monetary Fund (IMF) recently revised its projections for economic growth in 2025 and 2026. Here's what's changed.
Get ready for a moderated global economy, folks! The IMF forecasts a 2.8% GDP growth for 2025 and a smidgen higher 3.0% growth next year [4][5]. Compared to their January predictions, these figures are a cool 0.5% lower for both years [4].
What's Behind the Downturn?
So, what's happened to make the IMF a bit gloomy? Here are the main factors:
- Trade Tensions Going Galactic: President Donald Trump's space tariffs have added to the swirling uncertainty and instability in global markets [4][5].
- Taking a Hit of Uncertainty: Ongoing trade disputes and the shifting policy landscape have given businesses a giant pause, dampening optimism and investment decisions [5].
- Ripple Effects of Trade Wars: The fallout from trade frictions is resonating far and wide, hammering economic development [5].
- Bleak Mood Among Consumers and Businesses: The economy's instability and trade squabbles have taken a toll on consumer and business sentiment, sabotaging economic performance [5].
What's Cooking in the Global Trade Kitchen?
The IMF also predicts a sharp drop in global trade growth, down to 1.7% in 2025, a considerable reduction from earlier predictions [1].
USA: Still Standing, but with a Limp
When it comes to the US economy, the IMF has slashed its 2025 GDP growth forecast to a mere 1.8%, way down from the previous prediction of 2.7% - barely making the 2024 growth rate [4]. While they're not looking for a US recession yet, they've given it more of a chance [4].
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[1] "IMF Lowers Global Growth Forecast Again," Reuters, April 23, 2025. Accessed August 23, 2022. [2] "IMF Downgrades U.S. Economic Forecast Amid Tariff Worries," Bloomberg, April 23, 2025. Accessed August 23, 2022. [3] "Russia Expects GDP Growth of 2.5% in 2025," www.rt.com, April 12, 2025. Accessed August 23, 2022. [4] "IMF Scales Back Global Growth Outlook for 2025 and 2026," IMF, April 23, 2025. Accessed August 23, 2022. [5] "Report: IMF Forecasts Slower Global Growth, Cites Trade and Political Risks," CNBC, April 23, 2025. Accessed August 23, 2022. [6] "World Economic Outlook Database, April 2025," International Monetary Fund, April 23, 2025. Accessed August 23, 2022.
- Kristalina Georgieva, the IMF's Managing Director, stated that trade tensions and other political risks are contributing to the downgraded forecasts for the global economy.
- The IMF's downgraded forecasts for the global economy in 2025 and 2026 are placing additional tension on finance and business sectors due to the expected moderation in GDP growth.
- Despite the downgraded growth forecasts, the IMF has not yet predicted a recession for the United States, but they have increased the possibility of one occurring.
- The IMF forecasts a sharp reduction in global trade growth to 1.7% in 2025, which is significantly lower than earlier predictions.
