IMF Cuts Global Growth Forecast Amid Rising Trade Tensions

The International Monetary Fund has downgraded its global economic growth forecasts, citing U.S. tariffs at historic highs and increasing trade tensions. The global growth rate for 2025 and 2026 has been reduced, with significant impacts expected on major economies including the U.S., China, and the Eurozone.

The International Monetary Fund (IMF) has significantly revised its growth projections for the global economy, citing escalating trade tensions and the imposition of U.S. tariffs that are at 100-year highs. Projections for the U.S., China, and other major economies have been slashed as part of a broader downturn.

In an urgent update to its World Economic Outlook, prepared in the wake of President Donald Trump's announcement of universal tariffs, the IMF adjusted its growth expectation to 2.8% for 2025 and 3% for 2026. Inflation is also expected to rise, particularly in advanced economies like the U.S.

IMF's chief economist, Pierre-Olivier Gourinchas, emphasized the significance of trade tensions and uncertainty, warning of tightened financial conditions and lower growth across major regions. He underscored the need for policy stability to restore orderliness and predictability to the global trading system.

(With inputs from agencies.)