The International Monetary Fund (IMF) has cut down the global growth forecast for 2025 and 2026 due to instability in the global financial market.
The revision is largely driven by increased U.S. tariffs, now at 100-year highs, and counter-tariffs from its trading partners.
The updated World Economic Outlook (WEO) report released during the IMF Spring meetings on Tuesday, shows a more pessimistic view than the January 2025 projections.
According to the April 2025 WEO, Nigeria’s growth forecast has been cut from 3.2% to 3.0%. Global growth is now projected at 2.8% in 2025 and 3.0% in 2026, down from the earlier 3.3% for both years.
Pierre-Olivier Gourinchas, the IMF’s Chief Economist, noted that “the impact of escalating trade tensions is weighing on growth across all regions—including the U.S., Europe, and China.”
However, some countries were hit harder than others, with significant downward revisions to their economic outlooks:
- United States:
The U.S. growth forecast was revised downward by 0.9 percentage points for 2025—from 2.7% to 1.8%—and by 0.4 points for 2026—from 2.1% to 1.7%. The IMF pointed to high tariffs and resulting inflationary pressures as key factors. - China:
China’s economic growth is now projected at 4.0% for both 2025 and 2026, down from 4.6% and 4.5%, respectively. The report attributes this to continued trade frictions with the U.S. - Mexico:
Mexico saw one of the steepest downgrades. Its 2025 growth projection was slashed from 1.4% to -0.3%, while the 2026 forecast dropped from 2.0% to 1.4%. The IMF linked this to heightened U.S. tariffs on Mexican exports, increased geopolitical risk, and tighter financial conditions.
The IMF stated that policy shifts and mounting global uncertainty have made it necessary to reassess earlier projections. Inflation is now expected to decline more slowly than previously anticipated—reaching 4.3% in 2025 and 3.6% in 2026—under the weight of persistent trade disruptions.
“The swift escalation of trade tensions and heightened uncertainty over future policy direction continue to threaten global economic stability,” the IMF warned.
