WASHINGTON — The global economy is projected to slow this year and next as persistent uncertainty over trade policy and supply chain disruptions continue to weigh on world output, according to new forecasts published Tuesday by the International Monetary Fund.
In its latest World Economic Outlook report, the IMF said global economic growth would slow to 3.2% in 2025 from 3.3% last year. Growth is projected to fall to 3.1% in 2026, as the protectionist measures being adopted in the United States and around the world take hold.
The world economy is slightly stronger than economists at the IMF expected it would be earlier this year. That is because the United States scaled back or delayed many of the tariffs President Donald Trump threatened after taking office and because businesses raced to stock up on goods before tariffs took effect. Many firms have, for now, held off on passing additional costs to their customers.
But significant uncertainty remains. New tariffs on imported furniture, kitchen cabinets and lumber went into effect Tuesday. Trade tensions between the United States and China flared again last week, after Trump threatened to raise tariffs on Chinese imports by an additional 100% in response to new Chinese export controls. A protracted shutdown of the federal government in the United States could also weigh on the world’s largest economy this year.
“There are increasing signs that the adverse effects of protectionist measures are starting to show,” the IMF report said. “As the global economy slides into a more fragmented landscape, risks to the outlook increase.”
The projections are similar to those released last week by the World Trade Organization, which forecast slower trade growth in 2026 but said the world economy had remained more resilient in 2025 than previously expected.
The IMF’s economic projections come as finance ministers and central bank governors from around the world are gathering in Washington for the annual meetings of the IMF and the World Bank.
Under pressure from the Trump administration, those international institutions are shifting their priorities away from issues such as climate change and the economic impact it is expected to have around the globe. Instead, they are focusing on more traditional core policy issues such as financial stability and economic development.
Policymakers are expected to discuss a variety of topics, including details related to the Trump administration’s promised bailout of Argentina, discussions among the Group of 7 major industrialized nations about additional economic pressure on Russia and conversations between U.S. and Chinese officials that might calm the latest flare of tensions.
“World financial leaders will be converging in Washington as their economies struggle to deliver good growth even as the global economic and geopolitical landscape turns increasingly hostile,” said Eswar Prasad, the former head of the IMF’s China division and author of a new book on the unraveling of the world economic order. “As growth slows even moderately, structural issues that have been simmering under the surface will become increasingly apparent and difficult to ignore.”
The IMF projects that growth in the United States will slow to 2% this year from 2.8% in 2024. Growth in the euro area is expected to tick up to 1.2% from 0.9%. Japan’s economy is poised to strengthen this year, with output rising 1.1%, compared with 0.1% last year.
In China, growth is forecast to slow to 4.8% this year from 5% in 2024. With domestic demand tepid and trade ties with the United States fraying, growth is expected to continue to decline in 2026, falling to 4.2%.
Inflation continues to be a major challenge for policymakers as they grapple with the challenges of tariffs and sluggish growth.
The IMF said the impact of tariffs on inflation had been muted so far, but that there were signs price pressures were building in the United States.
“In the United States, inflation is expected to pick up beginning in the second half of 2025, as the impact of tariffs is no longer absorbed within supply chains and instead passed on to consumers,” the IMF said.
This article originally appeared in The New York Times.