In its latest World Economic Outlook, the IMF has sharply revised down its global growth projections due to dramatic escalation in trade barriers and persistent policy uncertainty.
Global GDP is now expected to grow just 2.8% in 2025 and 3.0% in 2026, down from 3.3% for both years in the January update, marking a cumulative 0.8 percentage point downgrade. The new projections fall well below the 3.7% historical average (2000–2019), reflecting the disruptive impact of US-led tariff hikes, which have pushed effective global trade barriers to levels not seen in a century.
The IMF’s “reference forecast” above incorporates all developments up to April 4, including the sweeping US tariff increase announced on April 2 and the initial retaliatory responses.
It also evaluates the scenario under more recent announcements, where the US paused most tariffs temporarily but maintained prohibitive duties on China. The report finds that this partial reprieve does not materially alter the global outlook, as overall trade restrictions between the US and China remain significantly elevated and policy-induced uncertainty continues to suppress investment and confidence.
For contrast, the IMF also presents an alternative forecast that excludes the April 2 tariff hikes. Under this more benign scenario, global growth for 2025 and 2026 would have seen only a modest 0.2 percentage point downgrade to 3.2%, highlighting the substantial damage inflicted by recent trade policy actions.
