IMF slashes GDP growth estimates for China, US and world as trade tensions rise

The International Monetary Fund (IMF) has cut its 2025 GDP growth forecast for the United States deeper than that of China, as the tit-for-tat retaliations between the world’s two largest economies risk a prolonged decoupling.
The lowered estimates came as a string of tariff salvoes launched by US President Donald Trump has roiled financial markets while weighing heavily on the global economic outlook.
The cut is larger than the world’s average – the Washington-based financial organisation slashed this year’s global economic growth estimate by 0.5 percentage points to 2.8 per cent.
“The downward revision is a result of greater policy uncertainty, trade tensions and a softer demand outlook, given slower-than-anticipated consumption growth,” the IMF said in the report.
It also revised up US inflation by 1 percentage point to 3 per cent, citing “stubborn price dynamics in the services sector, as well as a recent uptick in the growth of the price of core goods and the supply shock from recent tariffs”.
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