The International Monetary Fund (IMF) has revised its global growth forecast for 2025 down to 2.8%, from a previous estimate of 3.3%. This marks the slowest pace since 2020 and the second-lowest since the 2009 financial crisis.

The downgrade is driven by rising trade tensions, especially between the U.S. and China. U.S.-imposed tariffs have fueled uncertainty, reduced investment, and tightened global financial conditions.

For the U.S., the IMF cut its 2025 growth estimate from 2.7% to 1.8%, citing weaker consumer demand, policy uncertainty, and trade-related disruptions.

Despite these headwinds, trade talks between the U.S. and China appear to be gaining momentum. Officials from both sides are working toward a potential agreement to ease barriers and restore economic stability.

The IMF notes that resolving trade disputes will be critical for boosting investor confidence and supporting long-term global growth.