The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity, notes the International Monetary Fund’s April 2025 World Economic Outlook (WEO), which presents a “reference forecast” based on information available as of 4 April 2025 (including the universal US tariffs on 2 April and initial responses), in lieu of the usual baseline.

Under the reference forecast (see table below), global growth is projected to drop to 2.8 percent in 2025 and 3.0 percent in 2026 — down from 3.3 percent for both years in the IMF’s January 2025 WEO Update, corresponding to a cumulative downgrade of 0.8 percentage points, and much below the historical (2000–2019) average of 3.7 percent.

In the reference forecast, growth in advanced economies is projected to be 1.4 percent in 2025. Growth in the United States is expected to slow to 1.8 percent, a pace that is 0.9 percen