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India Today
22-04-2025
- Business
- India Today
IMF cuts global growth forecast, cites ‘significant slowdown' due to Trump tariffs
The International Monetary Fund (IMF) on Tuesday cut its growth forecasts for the US, China, and many other countries, blaming the sharp rise in US tariffs, now at 100-year highs, reported warned that further trade tensions could slow growth even more. The revised World Economic Outlook was prepared in just 10 days after President Trump announced sweeping tariffs on nearly all trading partners and proposed higher rates, which are currently on IMF reduced its global growth forecast to 2.8% for 2025, down by 0.5 percentage point, while the 2024 forecast was cut by 0.3 points to 3%, down from the January projection of 3.3% for both years. It has warned that the world economy is entering a difficult phase, as trade tensions and rising tariffs begin to take a toll. In a fresh update, the IMF said it expects slower growth in major countries, higher inflation, and growing comes after US President Donald Trump announced sweeping tariffs on several countries. These tariffs, the highest seen in a century, are already hurting global trade and pushing prices TO REMAIN HIGH, WHILE GROWTH TO SLOW DOWNThe IMF now expects global growth to be 2.8% in 2025, down by 0.5 percentage point from its earlier estimate. For 2024, it cut its forecast by 0.3 points to 3%. Inflation is also expected to come down more slowly than hoped, reaching 4.3% in 2025 and 3.6% in IMF said these forecasts were based on developments up to April 4, and the situation remains highly are entering a new era as the global economic system that has operated for the last 80 years is being reset," quoted IMF's chief economist Pierre-Olivier Gourinchas, according to ADDING TO UNCERTAINTY AND VOLATILITYGourinchas said the rapid rise in tariffs and unclear policies are creating serious challenges for the global economy. If trade tensions continue to grow, it could lead to more financial market volatility, tighter financial conditions, and even lower global growth, he demand for the US dollar has weakened, currency markets have remained stable so far, Gourinchas mentioned. However, he warned that growth in the coming years looks weak. The IMF sees global growth averaging just 3.2% over the next five years, well below the 3.7% average seen from 2000 to international agency has sharply reduced its forecast for global trade growth, cutting it by 1.5 percentage points to just 1.7% in 2025, nearly half the rate seen in 2024. This reflects growing fragmentation in global supply IMF anticipates the US economy to grow 1.8% in 2025, down from 2.8% in 2024, and 1.7% in 2026. It blamed policy uncertainty and tariffs for this slowdown. Inflation in the US is now forecast to hit 3% in 2025, a full percentage point higher than earlier the IMF does not see a recession in the US, it said the risk of one has risen from 25% to 37%. Gourinchas also warned that the Federal Reserve must stay focused on keeping inflation expectations under MEXICO AND EUROPE IMPACTEDUS trade partners Canada and Mexico have also seen their growth forecasts lowered. Canada is now expected to grow 1.4% in 2025 and 1.6% in 2026, while Mexico is likely to shrink by 0.3% in 2025 before recovering to 1.4% growth in Europe, growth in the Euro region is expected to slow to 0.8% in 2025 and 1.2% in 2026. Germany's economy is forecast to flatline in 2025, while Spain is expected to grow faster than the rest of the UK will also feel the impact of tariffs, with growth forecast at 1.1% in 2025 and 1.4% in 2026, lower than earlier estimates. The IMF pointed to higher government borrowing costs and weak private consumption as key FEELS THE PRESSUREIn Japan, trade tensions and tariffs are expected to reduce economic activity by 0.5 percentage point in 2025, with growth expected at just 0.6%. China, heavily reliant on exports, is also hit hard. Its growth is now forecast at 4% in both 2025 and 2026, lower than previous though tariffs are weighing on China, the IMF noted that the country's government is boosting spending to cushion the Watch
Yahoo
25-02-2025
- Business
- Yahoo
Trump Bets Big on Asia for U.S. Energy Dominance
Japan is planning to step up its imports of U.S. natural gas by potentially taking a stake in a $44-billion LNG project in Alaska—and it is not the only Asian energy importer to consider boosting U.S. energy supplies. President Trump is happy to enable this boost, with Asia turning into Trump's new energy dominance focus. On his first day in office, President Trump signed an executive order aiming to unleash 'Alaska's extraordinary resource potential,' which includes 'prioritize the development of Alaska's LNG potential, including the permitting of all necessary pipeline and export infrastructure related to the Alaska LNG Project, giving due consideration to the economic and national security benefits associated with such development.' Less than two weeks later, Reuters reported that Japan had expressed interest in participating in the project as a stakeholder and long-term buyer. It's not just about diversifying sources of energy imports. It's also about avoiding Trump's tariff threat, especially after the trade partners of the United States saw he was not joking when he slapped tariffs on Mexico and Canada. Last week, the Interior Secretary and the head of the new National Energy Dominance Council, Doug Burgum, indicated that Asia would be the focal point of energy dominance efforts in Washington. 'When we sell LNG to our friends and allies - from places like Alaska into Japan and South Korea and the Philippines - it not only helps stabilise the world, it also reduces our trade deficits,' he said during a speech to senators, as quoted by is worth noting that just because the Trump administration wants to see a boost in U.S. exports of liquefied natural gas to Asia, it does not mean it no longer cares about their growth in the European destination. Exports of LNG to Europe are important. They are simply not as important as exports to Asia. Because Asia is the region with the fastest economic growth on the planet. Europe, to put it mildly, is not. Last year, Europe guzzled as much as 55% of total U.S. exports of liquefied natural gas. That compared to 34% for Asia, and most of the remainder went to Latin American countries. This year started strongly for European purchases, too, as gas storage depleted fast, with Europe taking in 86% of all U.S. LNG exports in January. At one point, traders even began diverting cargoes from Asia to Europe because demand in Asia was lukewarm, while in Europe, it was soaring—and prices were following. However, this is a short-term development. Europe is desperate to get its hands on some gas, any gas, right now because winter season is not over yet, and its gas in storage level is at 40%, which is much lower than it was in the last two years. Then it would be replenishing season and this will keep European demand high, curbing demand from Asia. Again, this is a short-term development. Because Europe cannot survive economically by buying expensive energy. At some point, prices will curb demand—as will, theoretically, energy transition targets. Asia is doing much better in terms of economic development, not least because it has been less enthusiastic about the energy transition. Asian economies are growing, and they are wary of instituting hard targets for emission reduction. They also appear to have a much more realistic attitude to their future energy needs, as demonstrated by the Japanese government in its communication with Washington. 'If the Trump administration were to have its way, U.S. LNG would flow in massive quantities to Japan and South Korea and then would flow downstream... so that Southeast Asia would become economically dependent on the United States,' Kenneth Weinstein, who heads Japan analysis at the Hudson Institute think tank, told Reuters. 'It's redrawing the map of energy dependence.' This might be a bit too strong a description of the situation. One reason that Asia economies have been doing better in terms of energy supply than Europe is that they are open to all sources of energy as long as the price is right. Just because they will be importing more LNG from the United States it would not mean they would be shunning other major exporters such as Qatar and Australia—growing economies take a lot of energy to fuel. And they know how important diversification is. Exports of liquefied natural gas from the U.S. have been running at a record lately. This is good news for both importers and exporters, but it is not necessarily the new normal. Demand for electricity—and natural gas, consequently—is set to grow substantially in the U.S. itself, and prices would need to remain affordable to avoid a Norway electricity price scenario. The Trump administration would certainly encourage more gas production to keep feeding record exports and domestic supply, but the potential for this production growth is not exactly endless. So, the new U.S. administration may be aiming for global energy dominance, but what this would most likely mean is simply greater supply to key importers rather than creating dependencies. In the end, it always comes down to price. By Irina Slav for More Top Reads From this article on
