IMF Warns of Slowed Global Economic Growth Amid Trade Tensions
Washington, D.C., Wednesday, 15 October 2025.
The IMF’s latest report highlights a projected global growth slowdown to 3.2% in 2025 due to trade tensions, with potential long-term impacts on the U.S. and global markets.
Global Economic Slowdown: Current State and Projections
The International Monetary Fund (IMF) has revised its global growth forecast for 2025 to 3.2%, a slight downgrade from previous expectations, reflecting persistent trade tensions and inflation pressures [1]. This projection indicates a slowing trend that is expected to continue into 2026, with growth further slowing to 3.1% [1][2]. The report underscores that while the immediate impacts of recent tariffs have been somewhat contained, the longer-term implications could be more severe if protectionist measures persist [2][3].
Impacts of Trade Tensions and Tariff Policies
Recent developments have seen new tariffs imposed by the United States on various goods, including furniture, kitchen cabinets, and lumber, as of 14 October 2025 [1]. The tensions between the US and China have escalated, with threats of increased tariffs on Chinese imports by an additional 100% [1]. The IMF warns that these measures are already showing signs of adverse effects on the economy, with US growth projected to slow from 2.8% in 2024 to 2% in 2025 [1][2].
Regional Economic Outlooks and Policy Adjustments
The economic outlook varies across regions, with the Euro area expected to see a slight increase in growth to 1.2% in 2025, up from 0.9% in 2024, while Japan’s economy is projected to strengthen to 1.1% in 2025 [1][2]. Conversely, China faces a deceleration, with growth expected to slow from 5% in 2024 to 4.8% in 2025, and further down to 4.2% in 2026 [1]. The IMF suggests that policy adjustments focusing on restoring confidence and predictability could help mitigate these challenges [2][3].
Inflation and Market Stability Concerns
Inflation concerns are mounting, particularly in the United States, where it is predicted to rise as the effects of tariffs begin to filter through to consumer prices in the latter half of 2025 [1][3]. The IMF emphasizes the importance of maintaining price stability through independent monetary policies to manage these inflationary pressures [2]. Additionally, the potential for a market correction looms if the expected profitability gains from AI technologies do not materialize, further complicating the economic landscape [2].