WASHINGTON, Oct. 14 (UPI) -- The International Monetary Fund on Tuesday projected the global economy to grow 3.2% in 2025, according to its latest World Economic Outlook.
This figure represents a slowdown from 3.3% growth in 2024 but a 0.2% upward revision from the IMF's July projection, indicating more economic resilience than expected.
The modest predicted slowdown can be attributed to a muted shock from tariff announcements, IMF Chief Economist Pierre-Olivier Gourinchas said. But he warned of a downside risk from trade tensions that could result in a global output decrease of 0.2% by the end of 2026.
U.S.-China trade relations are especially strained, with back-and-forth escalation leading to an effective tariff on Chinese imports peaking at 145% in the spring. A 90-day truce was announced in May curbing escalating rates until Nov. 10.
Tensions flared last week when China's Ministry of Commerce announced sweeping rare-earth export controls, affecting target sectors such as military and defense. President Donald Trump responded with a plan to enact an additional 100% tariffs Nov. 1 -- a retaliatory move contingent on China's decision to proceed with rare-earth material restrictions.
