Global Economy Shifts: Tariffs Trigger Turbulence

The International Monetary Fund (IMF) has revised its global economic outlook downward due to President Trump's tariffs, predicting a global growth of 2.8% this year and 3% in 2026. The US is expected to grow at 1.8%, while China's expansion slows. Uncertainty could further impact economies worldwide.

The International Monetary Fund (IMF) has announced a significant downgrade in its projections for both the US and global economies, blaming the economic turbulence on President Donald Trump's tariffs and the surrounding uncertainty. This marks a departure from its January prediction of a 3.3% growth rate this year as it now anticipates a global economic growth of just 2.8% in 2023.

According to the revised projections, the US is expected to experience an economic growth of just 1.8%, a steep decline from the previous forecast of 2.7%. While a recession in the US is not yet on the horizon, the odds have increased to 37%, up from 25%. Meanwhile, China is grappling with a projected growth of 4%, with heightened tariffs causing a drag on its economic trajectory.

The IMF cited heightened uncertainty due to fluctuating import taxes as a primary factor, prompting the preparation of multiple growth scenarios. With the global economic structure undergoing a 'reset', according to chief economist Pierre-Olivier Gourinchas, the ramifications of these policies could include reduced investments and expansion pauses by companies worldwide.

(With inputs from agencies.)