by WASHINGTON — The U.S. growth forecast for this year has been given the biggest downgrade among advanced economies by the International Monetary Fund as a result of uncertainty caused by trade tariffs.
A recent forecast issued by the IMF has cut its 2025 growth forecast for the United States, citing uncertainty as a result of the current trade tariff situation.
Specifically, the IMF cut its outlook for U.S. growth to 1.8% this year — down 0.9 percentage points from January’s forecast.
Looking ahead, the group said it anticipates that U.S. growth will continue to decline, hitting only 1.7% in 2026.
By comparison, the IMF projections, which include some, but not all, tariffs levied this year, set the global economy to grow by 2.8% this year, representing a dip of 0.5% to the World Economic Outlook that was published in January.
With an eye toward 2026, global growth is being forecast to hit 3% next year, representing a slight dip of 0.3 percentage points from January.
According to Pierre-Oliver Gourinchas, the IMF’s chief economist, “We are entering a new era as the global economic system that has operated for the last 80 years is being reset.”
He added, “The risks to the global economy have increased and are firmly to the downside,” also claiming that due to the the recent U.S. tariff announcements, the group “more than halved the Fund’s outlook for global trade growth this year.”
Commenting on how President Trump’s tariff policy could impact the global economy, Gourinchas indicated that the tariffs would likely affect various countries differently but would ultimately hurt productivity while raising pricing.
Consequently, the IMF raised its forecast for inflation for the United States by 3% this year with an additional bump of 2.5% predicted for 2026.
The IMF also said that the U.S.’s top trading partners, China, Canada and Mexico, are each likely to be negatively impacted by President Trump’s current tariffs.
Considering the potential damage the tariffs may have on the world economy, Gourinchas believes it would be in the best interest of most countries to come to the negotiating table.
“Growth prospects could improve immediately if countries ease their current trade policy stance and implement clear and predictable trade rules,” he said.
