Forecast for 2025: IMF Explains How Trump’s Tariffs Will Impact the Economy and Increase Recession Risks
The International Monetary Fund has revised its forecast for 2025. The growth forecast for the U.S. economy in 2025 was cut by 0.9 percentage points — from 2.7% to 1.8%.
The revision was made against the backdrop of new tariffs introduced by Donald Trump and weakening consumer sentiment. The probability of a U.S. recession has risen to 40%, compared to 25% in October 2024, according to CNBC.
The White House’s introduction of tariffs not only hit U.S. stock markets but also triggered retaliatory measures from other trading partners.
IMF Chief Economist Pierre-Olivier Gourinchas emphasized that the new tariffs forced the Fund to urgently revise its forecasts.
"The April 2 announcement in the Rose Garden forced us to discard our forecasts, which were nearly finalized at the time, and compress a production cycle that normally takes over two months into less than 10 days," he wrote in the April World Economic Outlook report.
The IMF also downgraded its forecast for global economic growth in 2025 to 2.8% — 0.5 percentage points lower than the previous estimate.
"A common theme... is that tariffs represent a negative supply shock for the economy that imposes them," Gourinchas noted.
The U.S. inflation forecast was also revised upward to 3%, one percentage point higher than the January estimate.
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