The on-again, off-again nature of U.S. tariff policies – not to mention the policies themselves – have darkened the outlook for both U.S. and global economic markets.
That’s the projection of the International Monetary Fund, which said this week the economic outlooks for both have darkened.
The IMF’s latest World Economic Outlook predicted the global economy will grow just 2.8% this year, down from its forecast in January of 3.3%. And in 2026, global growth will be 3%, the fund predicts, also below its previous 3.3% estimate.
U.S. economic growth will come in at just 1.8% this year, the IMF predicts, down sharply from its previous forecast of 2.7% and a full percentage point below its 2024 expansion. The IMF doesn’t expect a U.S. recession, though it has raised its odds of one this year from 25% to 37%, according to a report from The Associated Press.
The forecasts line up with what many private-sector economists are expecting, the AP reported, though some do fear a recession is increasingly likely. Economists at JPMorgan say the chances of a U.S. recession are now 60%. The Federal Reserve has also forecast that growth will weaken this year, to 1.7%.
“We are entering a new era,” Pierre-Olivier Gourinchas, chief economist at the IMF, said. “This global economic system that has operated for the last eighty years is being reset.” The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty.
