Global Economy on Shaky Ground as IMF Slashes 2025 Growth Forecast

In a sobering update that’s sending ripples through global markets, the International Monetary Fund (IMF) has revised its 2025 global economic growth forecast downward to just 2.8%, citing rising instability caused by ongoing trade tensions and protectionist policies.

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The downgrade follows a sharp escalation in trade friction between the United States and several of its key economic partners, a situation fueled largely by the return of aggressive tariffs and diplomatic standoffs under President Donald Trump’s second-term trade agenda.

According to the IMF, the global economy is entering a “precarious phase” where uncertainty is beginning to outweigh momentum. Fragile supply chains, investor jitters, and disruptions in tech and energy markets are among the key triggers behind the slowdown.

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“Policymakers must act fast to avoid a full-scale recession,” said an IMF spokesperson during the spring meetings held in Washington, D.C. “Global cooperation is not just desirable it’s now essential.”

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Emerging markets are expected to bear the brunt of the slowdown, with several African and Asian economies already reporting sharp drops in export revenue.

Investors are also eyeing China’s next move, as the world’s second-largest economy may retaliate with its own tariffs, potentially dragging global markets into deeper volatility.

Analysts warn that if current conditions persist, the second half of 2025 could see a global financial contraction reminiscent of the 2008 crisis but with new digital and geopolitical complications.