By Francis Ntow
Washington DC, April 22, GNA – The International Monetary Fund (IMF) said trade tariff tensions will slow global economic growth for 2025 to 2.8 per cent from the January projection of 3.3 per cent.
The Fund also predicted a significant downgrade for 127 countries in 2025, while global growth in 2026 is projected to rise marginally to three per cent.
It added that the affected 127 countries account for about 86 per cent of world GDP and called on nations to address structural challenges to rebuild resilience and restore growth momentum.
This was detailed in the IMF’s April 2025 World Economic Outlook, released on the sidelines of the Spring Meetings—a joint event with the World Bank Group in Washington, DC, USA.
“If we get an escalation of trade tensions between the US and other countries, that will fuel additional uncertainty, [and] create additional financial market volatility, that will tighten financial conditions,” said, Pierre-Olivier Gourinchas, IMF Chief Economist.
Although the risk of recession had increased to 30 per cent, with global trade slowing to 1.7 per cent and investment pausing amid trade tariff tensions, Mr. Gourinchas said the Fund expected no recession.
“Despite the slowdown, global growth remains well above recession levels. Global inflation is revised up by about 0.1 percentage point for each year, yet the disinflation momentum continues,” he emphasised.
Gourinchas noted that the global economic system, under which most countries have operated for the past 80 years, is being reset, ushering the world into a new era.
He warned that reduced international development assistance could push low-income countries deeper into debt and jeopardise living standards.
“At this critical juncture, policies need to be calibrated to foster international cooperation while ensuring internal economic stability, thereby helping reduce global imbalances,” the IMF Chief Economist said.
Ms. Kristalina Georgieva, IMF Managing Director, remarked last Thursday that financial market volatility had escalated and that uncertainty over trade policies was at unprecedented levels.
She added that the revised growth forecasts would show significant downward revisions, although a recession was not anticipated.
Georgieva outlined three consequences of the trade tensions: costly uncertainty, a short-term negative impact on economic growth, and long-term erosion of productivity in smaller economies through protectionism.
“We need a more resilient world economy, not a drift to division. And to facilitate the transition, policies must allow private economic agents time to adjust and deliver,” she said.
She urged countries to “redouble efforts to put their own houses in order,” and to take resolute fiscal action to rebuild fiscal space, improve growth potentials, supported by a strong commitment to central banks’ independence.
GNA
KAS