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The global economy is facing increasing headwinds as escalating trade conflicts and heightened political uncertainty begin to take a toll. According to the latest World Economic Outlook (WEO) from the International Monetary Fund (IMF), global GDP growth is now projected to slow to 2.8% in 2025 and 3% in 2026.
This marks a downward revision from the IMF’s January forecast, which had anticipated 3.3% growth for both years. The updated forecast reflects a deteriorating global environment driven by shifting government policies and an intensification of trade restrictions.
Since the beginning of the year, several new tariff measures have been introduced, most notably by the United States. In response, key trading partners have implemented their own countermeasures. These developments culminated on April 2 with the imposition of near-universal U.S. tariffs, pushing average tariff levels to their highest point in a century. The IMF describes this as a major negative shock to global growth.
The uncertainty surrounding the speed and scope of these policy changes has also complicated economic forecasting. As such, the April WEO is considered a “reference forecast” based on data available as of April 4, 2025, and includes both the April 2 tariff announcement and the initial international reactions. The IMF has also released alternative growth scenarios based on different trade policy assumptions.
For Ukraine, the IMF has kept its GDP growth forecast unchanged—2% for 2025, rising to 4.5% in 2026.
On the inflation front, global core inflation is now expected to decline more gradually than previously anticipated, reaching 4.3% in 2025 and 3.6% in 2026.
IMF Managing Director Kristalina Georgieva has previously highlighted the growing fragmentation of global trade, noting that security concerns are increasingly influencing economic policy. This shift favors domestic production of critical goods like steel over cost considerations, signaling a return to economic self-reliance in many countries.
In a related development, the World Trade Organization (WTO) has significantly downgraded its 2025 forecast for global merchandise trade. The WTO now expects a 0.2% decline, reversing its previous projection of 3% growth issued last October.
