International News: IMF slashes global growth forecast-Belize in line for 3 percent growth but major trading partners projected to slow down

Published by [email protected] at April 25, 2025

Posted: Friday, April 25, 2025. 2:57 pm CST.

By Aaron Humes: The International Monetary Fund (IMF) has revised its economic growth forecasts downward for the United States and the United Kingdom, attributing these changes to rising tariffs and persistent global uncertainties, the BBC reports.

The powerful supranational economic agency has also issued a stark warning regarding the economic outlook for the Caribbean, forecasting a significant downturn for the region in the upcoming year. In its latest World Economic Outlook Report, the IMF predicts a decline of 4.2 percent for the Caribbean, a sharp drop from last year’s impressive growth of 12.1 percent.

Belize escaped the worst projections and is expected to see moderate growth, with a projected GDP increase of 3.2 percent. The Statistical Institute of Belize reported last month that its preliminary figures showed GDP growth of 8.2 percent for the entire year of 2024.

The report highlights the profound impact of global economic shifts, particularly the rising tensions tied to tariffs imposed by the United States. IMF Chief Economist Pierre-Olivier Gourinchas emphasized that the economic landscape that has been in place for the past 80 years is undergoing a critical reset due to historically high tariff rates and the associated uncertainty.

Despite the overall negative outlook, the IMF’s projections include some glimmers of hope for specific countries within the region. Guyana, buoyed by its burgeoning oil sector, is anticipated to achieve a notable growth rate of just over 10 percent. In contrast, Haiti is projected to face the steepest decline, with an estimated economic contraction of 1%.

The report also reflects on the broader trends in Latin America, where growth is forecast to slow to 2 percent in 2025, down from an earlier estimate of 2.5 percent. Mexico, facing its own challenges, has been given a discouraging forecast of -0.26 percent for the coming year.

Among major economic players, the IMF now predicts that U.S. economic growth will reach only 1.8 percent this year, a significant drop from January’s estimate of 2.7 percent. The Fund cautioned that heightened tariffs and trade tensions are expected to contribute to a “significant slowdown” in global economic growth as nations grapple with the interconnected nature of modern supply chains.

Meanwhile, the UK’s forecast has been adjusted down to 1.1 percent, though it remains higher than anticipated growth for Germany, France, and Italy. Inflation in the UK is expected to be the highest among advanced economies at 3.1 percent, largely driven by soaring energy and water bills.

Gourinchas expressed concern over the global economy, remarking that it “still bears significant scars” from the past four years of disruptions. He emphasized that firms are likely to react to increased uncertainty by pausing investments and reducing purchases, further impacting growth.

This news coincides with the spring meetings of the IMF and World Bank, where economic policymakers are gathering to discuss strategies for mitigating global economic challenges. In recent weeks, U.S. President Donald Trump reaffirmed his support for Federal Reserve Chair Jerome Powell, dispelling rumors of a potential dismissal amidst market volatility.

The ongoing trade war between the U.S. and China has intensified, with the U.S. imposing tariffs as high as 145 percent on Chinese imports, prompting retaliatory measures from Beijing. Trump has argued that these tariffs will benefit the U.S. economy by promoting domestic consumption and investment, despite the IMF’s warnings of potential negative impacts on global trade.

The IMF’s global growth forecast for this year has also been reduced from 3.3% to 2.8%, with expectations of a gradual recovery to 3.0% by 2026. In light of these developments, the probability of a U.S. recession has risen to 40%, compared to 25% last October.

The banking group Institute of International Finance has also noted the likelihood of a “shallow recession” in the U.S., predicting negative growth in the later quarters of 2025. Meanwhile, China’s growth forecast has been downgraded from 4.6% to 4%.

Advertise with the mоѕt vіѕіtеd nеwѕ ѕіtе іn Belize ~ We offer fully customizable and flexible digital marketing packages. Your content is delivered instantly to thousands of users in Belize and abroad! Contact us at mаrkеtіng@brеаkіngbеlіzеnеwѕ.соm or call us at 501-612-0315.