US Tariffs Trigger IMF Growth Downgrade for Global Economies

Editorial : Africa Eye

The International Monetary Fund (IMF) has slashed its global growth projections, pointing to unprecedented US tariffs as a key disruptor. Revised forecasts show 2025 growth dropping to 2.8% down 0.5% and inflation lingering at 4.3%, driven by trade policy chaos. The IMF’s emergency update, sparked by recent US tariffs on allies and rivals alike, warns of cascading slowdowns in the US, China, and the EU, with no region spared from the fallout.

IMF Chief Economist Pierre-Olivier Gourinchas labeled the crisis a global economic reset, stressing that escalating US-China tensions risk deeper volatility. Every tariff hike tightens financial screws, he told Reuters, noting weaker dollar demand and sluggish reforms. While markets remain stable for now, Gourinchas cautioned that prolonged trade wars could push growth below pre-pandemic levels, with medium-term forecasts stuck at 3.2%—far weaker than 2000-2019 averages.

The IMF urges nations to prioritize structural reforms over protectionism, warning that inflation and stagnation could persist without cooperation. “This isn’t a market panic yet,” Gourinchas said, but the clock is ticking.