The International Monetary Fund Raises Global Growth Forecast to 3.2%, Cautions on Risks from Trump’s Tariff Policies

The International Monetary Fund (IMF) has raised its forecast for global economic growth in 2025, citing a milder-than-expected impact from U.S. President Donald Trump’s recent tariff measures, though it cautioned that trade tensions still pose major risks.

In its latest World Economic Outlook (WEO) report released on Tuesday, the IMF increased its global growth projection for 2025 to 3.2%, up from 3.0% in July, while maintaining its 2026 estimate at 3.1%. The report was compiled before the most recent escalation in the U.S.-China trade dispute.

IMF Chief Economist Pierre-Olivier Gourinchas said the global economy has shown resilience, with private sector adaptability and fiscal stimulus in major economies—particularly in Europe and China—helping to offset trade shocks. “The good news is that the growth impact of the trade shock is modest so far,” he stated, while stressing that uncertainty remains high.

Since returning to office, President Trump has introduced sweeping tariffs on key trading partners, including China and the European Union, as part of efforts to strengthen U.S. manufacturing. Over the weekend, he threatened to impose 100% tariffs on Chinese goods, following Beijing’s decision to tighten export controls on rare earth minerals vital to defense and technology industries.

The IMF projects global inflation to stay elevated at 4.2% in 2025 and 3.7% in 2026, largely driven by persistent price pressures in major economies like the United States.

In regional forecasts, the IMF upgraded U.S. growth slightly to 2.0% in 2025 and 2.1% in 2026, though this marks a slowdown from 2.8% in 2024. China’s growth is expected to ease to 4.8% in 2025 and 4.2% in 2026, unchanged from earlier estimates, with weaker exports partly offset by stronger domestic demand.

Elsewhere in Asia, India’s outlook was raised to 6.6%, while Japan’s growth forecast improved to 1.1%. In Europe, the Eurozone is expected to grow by 1.2% in 2025 and 1.1% in 2026, reflecting modest gains amid persistent structural challenges.

Germany is projected to rebound slightly with 0.2% growth this year, while France faces slower growth at 0.7%, before improving to 0.9% in 2026. Spain remains a bright spot, with growth expected at 2.9% in 2025 and 2.0% in 2026.

Meanwhile, the United Kingdom is projected to expand by 1.3% this year and next. The Russian economy, however, is forecast to slow sharply to 0.6% in 2025, down from 4.3% in 2024, as the war in Ukraine continues to weigh heavily on its outlook.