The International Monetary Fund (IMF) released its latest World Economic Outlook (WEO) on April 22, 2025, titled “A Critical Juncture Amid Policy Shifts.” Presented by IMF Economic Counsellor Pierre-Olivier Gourinchas, Deputy Director Petya Koeva Brooks, and Division Chief Deniz Igan, the report highlights a significant downgrade in global growth forecasts, driven by escalating trade tensions and policy uncertainty. Below is a detailed summary of the key findings and projections.
Global Growth Outlook: A Significant Downgrade
The IMF projects global growth to reach 2.8% in 2025 and 3.0% in 2026, a cumulative downgrade of 0.8 percentage points from the January 2025 WEO update. This revision stems primarily from a surge in trade barriers, notably U.S. tariff announcements since late January, culminating in near-universal levies on April 2, 2025. The U.S. effective tariff rate has surpassed levels not seen in over a century, prompting counterresponses from trading partners.
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Alternative Scenarios: Without the April tariff hikes, global growth would have been 3.2% in 2025. A model-based forecast incorporating a temporary tariff suspension (announced April 9) and heightened U.S.-China bilateral tariffs yields a similar 2.8% growth outlook.
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Regional Impact: All regions face negative impacts. The U.S. growth forecast is revised down by 0.9 percentage points to 1.8%, with 0.4 points directly attributable to tariffs. China’s growth is cut to 4.0%, a 0.6-point downgrade, while the U.K. sees a 0.5-point reduction due to domestic factors and trade uncertainty.