With the spring meetings of the International Monetary Fund (IMF) and the World Bank being held in Washington, the United States has been warned that it is likely to suffer the most significant downgrade among advanced economies — to 1.8% from the 2.7% estimated by the IMF in January.
According to the IMF, there is now a 40% probability of a US recession this year. The UK can also expect a slowdown, the IMF has said, growing by 1.1% in 2025 instead of the previous estimate of 1.6%, with the global fallout from US trade tariffs being the reason for both declines as the IMF anticipates significant slowdown in global growth.
The UK’s 1.1% predicted growth will still leave it ahead of Germany (0%), France (0.6%) and Italy (0.4%) while China is expected to grow by 4% this year, down from the IMF's previous estimate of 4.6%.
IMF Managing Director, Kristalina Georgieva, said that countries’ resilience is being tested by what she called the “reboot of the global trading system”. Financial market volatility is up, she added, and trade policy uncertainty is literally off the charts.
“Let’s start with tariffs,” Ms Georgieva said. “Putting together all the recent tariff increases, pauses, escalations and exemptions, it seems clear that the US effective tariff rate has jumped to levels last seen several lifetimes ago. Other countries have responded.”
She did not mention it but the US recently announced plans to impose new tariffs as high as 3521% on solar panels from Cambodia, Thailand, Malaysia and Vietnam following complaints from domestic manufacturers of these products.
