The International Monetary Fund reduced its global growth prospects on Tuesday, citing the frenzy of President Donald Trump’s price as the start of a “new era” for the world economy.
The group has greatly reduced its growth forecasts to 2.8% for this year, 0.5 percentage points below its prospects in January. According to Bloomberg, this will mark the slowest expansion since 2020 and the second perspective since 2009.
International Monetary Fund
The IMF expects global growth to reach 3% in 2026, 0.3 percentage points below its previous forecasts.
“The resulting epistemic uncertainty and the unpredictability of the policies that have resulted are a major engine of economic perspectives. If it is supported, this brutal increase in prices and the uncertainty of the participants will considerably slow global growth”, the IMF is justified in its last global economic perspectives.
The group has referred to the massive redesign of trade that Trump tries to apply by releasing a volley of prices on all American trade. The White House has argued that imports on imports, introduced earlier this month, will encourage nations to renegotiate trade agreements with the United States.
But they also stimulated enormous recession anxiety and fears of more inflation.
Although the IMF is still optimistic about the global recession can be put forward, it considers the United States as among the biggest victims of Trump’s pivotal policy movements.
International Monetary Fund
The American economic prospects have been reduced most among the advanced savings. The IMF expects American growth to reach 1.8% and 1.7% this year and next year.
For comparison, the United States increased by 2.8% in 2024.
“Decreasing revision is the result of greater political uncertainty, trade tensions and softer demand prospects, given the growth of consumption slower than consumption,” said the report.
Although circumstances can improve immediately if the hard commercial positions are relaxing, there is also the risk that worsens tensions weighs more on growth, the IMF warned.
“Financial conditions could be tightened further because the markets react negatively to the decrease in growth prospects and increased uncertainty. Although banks remain well capitalized overall, the financial markets can be faced with more serious tests,” he said.
