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Pierre-Olivier Gourinchas, Chief Economist of the International Monetary Fund (IMF), speaks at a news conference on April 16, 2024, in Washington. (AP Photo/Jacquelyn Martin, File)
The International Monetary Fund, IMF, has reduced its global growth projections for 2025 because of the wave of recent economic uncertainty. That’s according to its latest World Economic Outlook, WEO, released on Tuesday.
Growth forecasts for Latin America and the Caribbean have also been cut as part of the IMF’s latest projections.
Mahiri Stewart tells us more.
The IMF says following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through 2024 and was projected to remain so in 2025.
However, the IMF says the landscape has changed as governments around the world reorder policy priorities.
Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States and countermeasures by its trading partners have rocked global markets.
The IMF says this unpredictability has had additional negative impacts also on economic activity and the outlook for Global Growth.
Under the reference forecast that incorporates information as of April 4, global growth is projected to drop to 2.8 per cent in 2025 and 3 per cent in 2026. This is a downward revision from 3.3 per cent for both years in the last update in January.
The downgrade puts global growth well below the average of 3.7 per cent.
For Latin America and the Caribbean, growth has been revised down to a regional average of 2 per cent in 2025 and 2.4 per cent in 2026. This is a reduction of 0.5 per cent and 0.3 per cent respectively.
The IMF says revisions to growth reflect weaker-than-expected activity in late 2024 and early 2025 as well as the impact of tariffs imposed by the United States, the associated uncertainty and geopolitical tensions, and a tightening of financing conditions.
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