Global economic growth is expected to slow down significantly due to US President Donald Trump’s tariffs, with the IMF predicting a rate of 2.8% in 2025.
The International Monetary Fund (IMF) has predicted that global economic growth will slow down significantly due to US President Donald Trump‘s tariffs. ‘The global economy is expected to grow at a rate of 2.8% in 2025, which is lower than the previously forecasted 3.1% for 2024 and 3.3% for 2025.’ The global economy is expected to grow at a rate of 2.8% in 2025, which is lower than the previously forecasted 3.1% for 2024 and 3.3% for 2025.
The IMF‘s Global Financial Stability Report (GFSR) was published on Tuesday, following Trump‘s announcement in April that imposed tariffs on various countries, including China. ‘The report stated that global financial stability risks have increased significantly due to tighter global financial conditions and heightened economic uncertainty.’ The report stated that global financial stability risks have increased significantly due to tighter global financial conditions and heightened economic uncertainty.
The International Monetary Fund (IMF) is an international organization that oversees global economic stability.
Founded in 1944, the IMF works to promote financial cooperation among its member countries.
Its primary goals include exchange rate stability, reducing poverty, and encouraging economic growth.
The IMF provides loans to countries facing economic difficulties and offers policy advice to help them stabilize their economies.
With 190 member countries, the IMF plays a crucial role in maintaining global economic order.
The US tariffs have a significant impact on global trade growth, particularly on bilateral trades between the US and China. Lower bilateral trades weigh down on global trade growth, according to Pierre-Olivier Gourinchas, IMF economic counsellor. ‘The ripple effects of Trump’s decisions extend beyond Washington, with rising bond yields increasing in countries previously considered safe choices, driving up borrowing costs globally.’ The ripple effects of Trump‘s decisions extend beyond Washington, with rising bond yields increasing in countries previously considered safe choices, driving up borrowing costs globally.
Trump‘s tariffs have hit different sectors and economies, creating global challenges. Emerging market economies already facing the highest real financing costs in a decade may now need to refinance their debt and fund fiscal spending at higher costs. ‘The IMF also warned that global tensions, including wars and military conflicts, could make the financial system even more unstable.’ The IMF also warned that global tensions, including wars and military conflicts, could make the financial system even more unstable.
The IMF projects that growth would slow to 0.8% in the Euro area in 2025, and to 1.2% in 2026. Germany was set to see economic growth of 0.0% in 2025 and 0.9% in 2026, with the IMF‘s forecast cut by 0.3 and 0.2 percentage points, respectively.
Mexico rejected the IMF‘s projection of a shrinkage of its economy to 0.3% this year, citing that it is too pessimistic. ‘The country has a plan to strengthen its economy, according to President Claudia Sheinbaum.’ The country has a plan to strengthen its economy, according to President Claudia Sheinbaum.
