IMF downgrades its projections for US economic growth

The International Monetary Fund (IMF) downgraded its economic projections for the United States by 0.9 percentage points from January 2025. The escalation of the trade war is the main argument used by the United Nations-integrated agency to outline its calculations.

Through a report titled "World Economic Outlook," the IMF predicted that the U.S. economy will only grow by 1.8% this year, when in January it estimated through another study by the same name that growth would be 2.7%.

The U.N. financial body said the tariff war, in addition to political instability, will have "a major impact on global economic activity."

Pierre-Olivier Gourinchas, IMF chief economist, detailed that "trade tariffs act as a supply shock on tariffing countries, reducing productivity and increasing unit costs. Tariffed countries face a negative demand shock as export demand diminishes, exerting downward pressure on prices."

In 2024, the U.S. economy grew by 2.8% and, in 2023, by 2.9%. For 2026, the IMF projected a 2.1% rise.

IMF pessimism

Apart from the U.S. forecasts, the financial body predicted worse results in the rest of the world. In addition, the IMF predicted that the world economy will grow by 2.8%, when in January it said it would increase by 3.3%.

Regionally, the worst off is Middle East and Central Asia, whose economy is forecast to improve by 3% (in January it said the increase would be 3.6%). Emerging and developing economies in Asia, instead of rising by 5.1% as the IMF predicted at the beginning of the year, are now projected to grow by 4.5%.

The IMF also lowered its forecasts for the eurozone: in January it was forecast to grow by 1%; now, by 0.8%. The main powers in the region will barely grow, and even some, such as Germany, will remain unchanged.

The economy of Latin America and the Caribbean will grow by 2.0% (in January, the IMF forecast 2.5%) and that of Sub-Saharan Africa by 3.8%.