IMF April 2025 WEO: Global Growth Cut on US Tariffs
Why in the news
Uncertainty over US reciprocal tariffs and trade deals made forecasting hard, and the IMF issued scenario-based projections.
Key facts
- Three scenarios: reference forecast (announcements to 4 April), forecast with March data, and post-9 April view after the tariff pause.
- Global growth: cut by 50 bps for 2025.
- Trade volumes: from 3.8% (2024) to 1.7% (2025).
- US inflation projection: raised by 100 bps.
Growth figures
| Economy | Projection and change |
|---|---|
| World | 3.3% (2024), 2.8% (2025), 3% (2026) |
| US | 1.8% in 2025, down 90 bps |
| China | 4% in 2025, down 60 bps |
| India | 6.2%, down 30 bps; impact seen as marginal |
Risks
- Supply chain disruption could shift resources to less efficient uses.
- Tariffs may raise inflation; Fed Chair Powell acknowledged persistent inflation risk.
- US financial markets and the dollar may turn volatile, tightening financial conditions.
India’s best bet
Early completion of bilateral trade talks with the US is seen as the best way to limit risk, while policymakers stay alert.
Exam angle
- Report: IMF World Economic Outlook (April 2025).
- Related terms: reciprocal tariffs, stagflation-style risks, basis points.