The International Monetary Fund has greatly reduced its forecast for global economic growth, citing the disruptive impact of the new prices of President Donald Trump, AFP reported.
In its latest global economic perspectives published Tuesday, the IMF now expects the world economy to increase by 2.8% in 2025, down 0.5 percentage points compared to its January screening.
Growth in 2026 is expected at 3.0%, also slightly lower than previous estimates. The IMF has warned that the escalation of trade tensions, combined with political uncertainty, reshapes a global economic system that has existed for 80 years.
“We are entering a new era because the global economic system that has operated for 80 years is being reset,” said the chief economist of the IMF, Pierre-Olivier Gourchas.
He noted that the growth of exchanges has dropped sharply due to American tariff increases, the fund projections, including measures announced until April 4. More recent prices – such as those that increase American samples from Chinese products to 145% – were not taken into account in this report.
A distinct IMF report, the global financial stability report, warned that the deployment of Trump’s incoherent rate adds to the risks in the global financial system.
“The global risks of financial stability have increased considerably,” said the report, awarding the increase to stricter financial conditions and increased uncertainty.
US growth forecasts were reduced to 1.8% for 2025, compared to 2.7% in January, due to trade tensions, the unpredictability of policies and lower demand. The IMF also increased its inflation forecasts for the United States to 3.0% this year.
The main American trade partners should feel the pinch. China’s projected growth is down to 4.0%, Mexico should now contract by 0.3% and Canada’s prospects were considerably reduced. In Europe, the euro zone forecasts have been reduced to 0.8%, Germany planning to see no growth.
An exception is Spain, where growth has been revised up to 2.5%. Meanwhile, the Middle East and sub-Saharan Africa will also see slowdowns, although recovery is expected in 2026 while oil disturbances and conflicts facilitate ease.