Global growth has been revised downward and inflation projections nudged upward
Global growth has been revised downward and inflation projections nudged upward in the latest World Economic Outlook released on Tuesday by the International Monetary Fund (IMF). The fund now expects global GDP to grow by 2.8% this year, a 0.5 percentage point cut from its January estimate.
The IMF attributed the downward revision largely to trade tensions initiated by U.S. President Donald Trump. It warned that tariffs represent a “negative supply shock” that is fueling uncertainty and triggering a “significant slowdown” in global activity.
“In the medium term, we can expect tariffs to decrease competition and innovation, and increase rent-seeking, further weighing on the outlook,” the report noted.
The sharpest downgrade among advanced economies was reserved for the United States. The IMF now expects U.S. growth to reach just 1.8% in 2025, down from 2.7% in January, citing the growing uncertainty caused by escalating trade tariffs.
In the eurozone, where the impact of tariffs has been relatively milder, growth is now forecast at 0.8%, a modest 0.2 percentage point downgrade. Nonetheless, stronger fiscal stimulus in both Europe and China is expected to provide some support through this year and into next.
However, the outlook for emerging market economies remains
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