The global economy outlook forecast shows that the IMF predicts global growth will decline to 2.8% in 2025 and 3% in 2026 due to the announcement of a series of new US tariff measures and measures by trading partners.
“Following an unprecedented series of shocks over the past few years, global growth was overwhelming yet stable until 2024, and was expected to remain in the January 2025 World Economic Outlook (WEO) update. However, it has steadily changed its global sorting priorities. It ends with US tariffs near April 2, bringing effective tariff rates to levels not seen in the first century. The rapid escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a major impact on global economic activity,” the fund states.
The forecast represents a downward shift from the 3.3% forecast for both years in the January 2025 World Economic Outlook.
The fund said its own tariffs represent “a major negative impact on growth,” but added that “the unpredictability these measures are rolling out will have a negative impact on economic activity and outlook, and at the same time will be more difficult than usual.”
Given the complexity and liquidity of the present moment, this report presents a “reference forecast” based on information available as of April 4, 2025 (including tariffs and initial responses for April 2). “Instead of a normal baseline,” the fund said.
Emerging markets have hit
Growth is expected to slow down around the world. Emerging markets and developing countries will have fallen to 3.7% and 3.9% in 2025, with major downgrades expected in countries most affected by recent trade measures such as China.
The developed economy is projected to grow by 1.4% in 2025, with 1.8% in the US, 0.9% lower than the US forecast included in the January 2025 WEO update.
Commenting on the impact of a slow pace of growth on inflation, the IMF said, “Inflation in global headlines is expected to decline at a slightly slower pace than expected in January, reaching 4.3% in 2025 and 3.6% in 2026.”
To counter the slow pace of growth, the IMF advised that the country should “work constructively to promote a stable, predictable trade environment, promote debt restructuring and address shared challenges.”
They also advised that a focus should be on addressing “domestic policy and structural imbalances” to ensure “domestic economic stability.”
Africa's momentum has been suspended
Helbendva, Minister of Finance of the Central African Republic, Vice-Chairman of the African Finance and Governor of the Central Bank, and IMF Managing Director Christari Nageorgieva issued a joint statement at the end of the IMF's African Consulting Group Meeting.
“While Africa's growth has shown some resilience in the face of multiple shocks, a sudden change in global outlook has disrupted growth momentum. Continental growth fell by 0.3 percentage points in 2025. The differences between fragile conflicts and conflict-affected states face particularly severe challenges.”
