The International Monetary Fund (IMF) has given the US economic growth forecast its biggest downgrade among advanced economies for this year, citing uncertainty caused by trade tariffs imposed by US President Donald Trump in early April.
Growth is now expected to be 1.8% this year for the US, down from the IMF's estimate of 2.7% in January. The sharp increase in tariffs and uncertainty is expected to lead to a significant slowdown in global growth, according to the Fund's prediction.
The forecast for the UK has also been cut, with the economy now expected to grow by 1.1% this year. But the IMF has predicted UK economic growth will be stronger than Germany, France, and Italy. Inflation in the UK, however, is expected to be the highest in the world's advanced economies, at 3.1% this year.
IMF Chief Economist Pierre-Olivier Gourinchas said the global economy "still bears significant scars" from the "severe shocks of the past four years." The IMF stated that there is now a 40% probability of a US recession this year, higher than its estimate of 25% in October of last year. The banking group, the Institute of International Finance, said it expected a "shallow recession" in the US later this year, with negative growth in the third and fourth quarters of 2025.
