The International Monetary Fund (IMF) has slashed its outlook for GDP growth in the U.S. from its January prediction, cutting its forecast from 2.7% to 1.8%.
According to CNBC, the U.S. saw the largest downgrade in expected GDP in 2025 between January and April at -0.9%, followed by Canada (-0.6%), Japan (-0.5%) and the United Kingdom (-0.5%). The IMF also now believes there is a 40% chance for a recession in the U.S., up from 25% in October 2024, citing a dip in consumer confidence and the uncertainty created by the Trump administration's trade policies. Projections from other economists have been even more bearish, with J.P. Morgan putting the odds of a recession at 60% in its April 15 forecast.
"The common denominator is that tariffs are a negative supply shock for the economy imposing them," IMF chief economist Pierre-Olivier Gourinchas told reporters on April 22.
The IMF raised its projected inflation outlook for the U.S. to 3% as well, up from the 2% rate it forecast in January, due to "stubborn price dynamics in the service sector," as well as a recent uptick in the price of core goods, as well as the "supply shock" created by Trump's tariffs. The group noted that Trump's 90-day pause on higher tariffs against dozens of countries didn't change its forecast either, given the fallout from back-and-forth trade war between the U.S. and China since the freeze was announced.
