The International Monetary Fund, IMF has projected a global growth of 2.8% for 2025, a major downgrade reflecting escalating trade tensions and high policy uncertainty.
In its new World Economic Outlook, WEO, the IMF during the ongoing World Bank Group Spring meeting, said the global economy is entering a new era as effective tariff rates have reached levels not seen in a century.
Our WEO revises down global growth to 2.8% in 2025 with trade growth slowing to just 1.7%. Inflation is revised up by about 0.1 percentage point.
Without the April tariffs, the global growth forecast would be fairly similar to that projected in January. Under the tariffs, global growth is projected to slow down significantly but remain above recession levels” IMF stated.
Specifically, the IMF’s new growth projections states that the US will expand by 1.8%, Nigeria by 3.0%, UK by 1.1%, China by 4.0%.
Others are; Germany: 0.0%, France: 0.6%, Italy: 0.4%, Spain: 2.5%, Japan: 0.6%, Canada: 1.4%, India: 6.2%, Russia: 1.5% and Mexico: -0.3%.
The managing director of the International Monetary Fund, Kristalina Georgieva in her X official handle
applauded the efforts out in place by the Nigerian government in its economic reform.
The report also stated that its 70 low-income country members experienced steady but modest growth of an average 4.4 percent in 2024, but large uncertainty and downside risks loom over the outlook.
It said “The 70 low-income countries (LICs) in the IMF’s membership experienced steady but modest growth in 2024, with marked divergence across countries.
While 11 of the 20 fastest-growing countries in 2024 were LICs, many of the poorer and often also fragile and conflict-affected countries saw virtually no progress in per capita incomes over the past 15 years.
Gradual fiscal consolidation proceeded in about half of the LICs, supporting further stabilization of public debt levels, but elevated debt service continues to constrain priority spending in many LICs.”
The IMF however said that growth is expected to accelerate over the medium term, while recent policy announcements on trade measures and official development aid would add to already elevated uncertainty and downside risks surrounding the outlook.
IMF chief economist, Pierre Olivier Gourinchas said
“Our policy recommendations call for prudence and improved collaboration, saying that the first priority should be to restore a clear, stable and predictable trade environment.”
Also Monetary policy must remain agile; rebuilding fiscal buffers is crucial, and structural reforms remain needed.
On exchange rate regimes, the IMF said that there has been a clear trend among LICs to move away from market-determined exchange rates toward more tightly controlled arrangements, resulting in inconsistencies between de jure and de facto exchange rate arrangements.
Victoria Ibanga
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