IMF: Probability of US recession in 2025 is 40% compared to 27% in October

IMF: Probability of US recession in 2025 is 40% compared to 27% in October

The International Monetary Fund (IMF) has recently revised its outlook for the U.S. economy, increasing the probability of a recession in 2025 to 40%, up from 27% in October [1]. This significant shift reflects growing concerns about the economic impact of President Trump's tariff measures and the broader trade tensions.

The IMF's World Economic Outlook, released on April 20, 2025, highlights that U.S. growth is expected to drop nearly a full percentage point lower than pre-tariff estimates, to 1.8%, due to greater policy uncertainty, trade tensions, and lower consumer spending [2]. The IMF attributes this slowdown to the "major negative shock" of Trump's reciprocal tariffs, which have led to a significant slowdown in global growth in the near term.

The IMF's revised projections indicate that the global economy is at a critical juncture, with tariffs and uncertainty leading to a slowdown in economic growth. The organization expects inflation to rise in the U.S. as a result of tariffs, reaching 4%, and warns that central banks should be vigilant regarding the risk of prematurely cutting rates. The IMF also expects a decline in growth for China, the prime target for U.S. tariffs, to 4% in 2025, down from an estimated 4.6% in January [2].

The increased probability of a recession in the U.S. is a stark reminder of the potential economic fallout from ongoing trade disputes. While the stock market saw some relief last week after Trump announced a 90-day pause on tariffs, the IMF's outlook underscores the ongoing risks to the U.S. economy [1].

References:
[1] https://www.benzinga.com/markets/cryptocurrency/25/04/44891685/gary-black-shares-polymarket-data-says-trump-tariffs-have-pushed-odds-of-2025-recession-to-57
[2] https://finance.yahoo.com/news/imf-expects-significant-slowdown-in-2025-from-trump-tariffs-and-economic-uncertainty-130043437.html