IMF lowers China’s economic growth forecast for 2025 to 4.0%

On April 22, the International Monetary Fund (IMF) lowered its global economic growth forecast for 2025 by 0.5 percentage points from its last forecast in January to 2.8%. Affected by the high tariff policy of the Trump administration in the United States, all regions have been downgraded and are in a general downturn.

Tariffs have also hit the United States itself hard. The IMF sounded the alarm, saying that there is a 30% probability of falling below 2%. Falling below 2% is the rough benchmark for “deterioration of the world economy.”

Due to the erratic tariff policy of the US government, the IMF took the rare step of setting the forecast time for the basic trend to April 4 and announcing the expected value of the intermediate stage forecast.

As of late March, the IMF predicted that the growth rate in 2025 would decline slightly by 0.1 percentage points. Expectations suddenly deteriorated due to the large-scale reciprocal tariffs announced by US President Trump on April 2.

In 2025, the growth of global trade volume will shrink to about 1.7%, less than half of the 3.8% in 2024. Supply shocks such as the COVID-19 pandemic, which stopped the flow of goods around the world, will drag down overall growth.

IMF Chief Economist Pierre-Olivier Gourinchas pointed out that not only the intensification of trade frictions, but also the “risk of a sharp deterioration in the financial situation” is a hidden worry in the future.

The United States, the epicenter, has made the largest downward adjustment. The IMF’s forecast for the US growth rate in 2025 has dropped by 0.9 percentage points to 1.8%, a sharp slowdown from 2.8% in 2024. There is a 37% chance of a recession this year. Trump believes that the economic slowdown is a “short transition period”, but the IMF has also lowered the US growth rate in 2026 by 0.4 percentage points to 1.7%.

The IMF predicts that China’s growth rate will drop by 0.6 percentage points to 4.0% in 2025. Compared with the United States, which is expected to slow down from the high growth in 2024, China’s fiscal stimulus policy will support the economy. However, the IMF’s estimates for China and the United States do not include the confrontation of countermeasures that intensified after the 4th, and the decline may be further expanded.

The forecast for Japan is to grow by 0.6%, a decrease of 0.5 percentage points. The 25% industry tariff on automobiles will suppress exports. The largest decline was in Mexico, which was listed as a high tariff target from the beginning, with a decrease of 1.7 percentage points and a negative growth of 0.3%.

Among the 16 major economies, only Russia and Spain have slightly increased. The Trump administration excluded Russia from the target of reciprocal tariffs. Trump explained, “Because there is basically no business (with the United States).”

The IMF believes that the forecast is more likely to deteriorate in both the short and long term.