The International Monetary Fund (IMF) revised global growth projections downward and highlighted heightened risks from trade policy uncertainty.
Key Findings – Reference Forecast (as of April 4, 2025)
Global output is projected to expand by 2.8 percent in 2025, down from 3.3 percent in the January 2025 WEO Update—a cumulative downgrade of 0.5 percentage point for this year and 0.3 percentage point for 2026 (to 3.0 percent) .
Inflation is expected to ease more slowly, at 4.3 percent in 2025 and 3.6 percent in 2026, with upward revisions especially for advanced economies .
Regional Forecasts
Advanced economies are expected to grow by just 1.4 percent in 2025.
The United States is projected to slow to 1.8 percent growth in 2025, a 0.9 percentage point downgrade since January, attributed to trade tensions and weaker demand .
The Euro area is forecast to grow at 0.8 percent in 2025, slightly downgraded from earlier projections .
Emerging market and developing economies are expected to expand by 3.7 percent in 2025 and 3.9 percent in 2026, with China’s forecast lowered notably due to its export exposure .
Drivers & Risks
The IMF attributes the downgrade largely to new U.S. tariffs implemented by April 2—raising effective tariff rates to levels not seen in a century—and the uncertainty surrounding ensuing policy responses .
High policy unpredictability and volatile financial markets pose risks of further tightening of global financial conditions, threatening both short- and long-term growth .
A protracted trade conflict may undercut international cooperation, delaying progress toward a more sustainable global economy .
Policy Recommendations
The IMF urges policymakers to foster a stable and predictable trade environment and strengthen cooperation across borders.
Domestic structural reforms are encouraged, including policies to support healthy aging, increase female and older-worker labor force participation (Chapter 2), and integrate migrants and refugees more effectively while addressing skill mismatches (Chapter 3) .
Forecast Basis & Caveats
All projections are based on the reference scenario as of April 4, 2025, reflecting trade developments and initial policy responses through that date .
While IMF staff updated data through April 14, 2025, some recent economic releases may not be fully incorporated .
Statements from IMF Leadership
Pierre‑Olivier Gourinchas, IMF Chief Economist, emphasized:
“We are entering a new era as the global economic system that has operated for the last 80 years is being reset.”
He noted the risk of a U.S. recession has risen from ~25 percent last October to ~40 percent, though a downturn is not yet projected in the baseline forecast .
Outlook Summary
The global economy is facing a critical inflection point, amid high tariff shocks, policy volatility, and financial turbulence. The IMF stresses the need for global cooperation and structural policy reforms to avoid further downgrades to growth, minimize inflationary pressures, and safeguard economic stability.
