On Tuesday, the International Monetary Fund reduced its forecast for economic growth in most countries of the world, including the United States and China, pointing to the repercussions of the recent tariff wave imposed by the US administration, which he described as “the highest in a century”.
Reuters said that the fund reduced its forecast for global growth for 2025 by 0.5 percentage points to 2.8%, and by 0.3 points for 2026 to 3%, compared to January estimates last January.
A direct impact of commercial escalation
“We enter a new era in which the global economic system prevailing for 80 years … a rapid escalation of trade tension and very high levels of uncertainty about future policies will have a significant impact on global economic activity.”
https://www.youtube.com/watch?v=h0evzr6t-rw
Gorinche explained that the American fees imposed by President Donald Trump by 145% on most Chinese products and reaching 245% on electric cars, prompted the IMF to reduce its expectations for China’s growth in 2025 to 4%, compared to 4.6% in previous estimates, according to the French Press Agency.
On the other hand, China imposed 125% customs definitions on American products, and officially stated that it “will continue to confront to the end”, which constantly warns the atmosphere of economic instability, according to the report.
Various growth … and fears of recession
The fund reduced its expectations for the growth of the US economy to 1.8% in 2025, or about 0.9 percentage points than previous expectations, while US inflation was estimated at 3% as a result of customs duties and the power of the services sector, according to Jorincha.
In Canada, the expected growth was reduced to 1.4% in 2025, while Mexico witnessed the worst modifications, as its growth declined to -0.3%, down 1.7 percentage points.
The amendments also included the euro area, which is expected to achieve a weak growth not exceeding 0.8%in 2025. Germany, its forecast fell to 0%, while Spain represented an exception, with a positive amendment to 2.5%.
In Britain, the expected growth of 2025 decreased to 1.1%, or about half a percentage point than January estimates.
China, the greatest affected
The report, which the Fund described as “a reference until April 4”, explained that the Chinese economy suffers from a weakness in local consumption and a local debt crisis caused by the deterioration of the real estate sector, in addition to the decline in consumer confidence since 2022.
https://www.youtube.com/watch?v=j18pxlmd7bq
Although China’s domestic product registered 5.4% in the first quarter of 2025, analysts reported by Reuters suggested that this height was temporary, as a result of the acceleration of deliveries before entering the fees space.
An expensive trade and a mysterious trade system
The fund also reduced its expectations for global trade growth to only 1.7% in 2025, equivalent to half of the estimated growth rate for 2024. Gorrenha said that high fees will lead to a “significant decrease” in trade between the United States and China, explaining: “Trade will continue, but at a higher cost and less efficiency … ambiguity on investment places and supply sources affect expectations.”
He pointed out that the ability to predict the commercial system “has become very important”, and that major structural reforms are required to change the global economic path.
Medium -term expectations … without historical average
The Fund kept its expectations for the global economy growth in the medium term at 3.2% annually for the next five years, compared to an average of 3.7% between 2000 and 2019, with the absence of indicators for tangible structural improvement.
Jorincha concluded that “the demand for the dollar began to decline gradually,” but stressed in a statement to Reuters that “the global monetary system is still strong … We are not concerned about its stability at this stage.”
Source : Al Jazeera + Reuters + French + Bloomberg
