IMF slashes SA, global growth forecasts as tariffs reach highest level in a century under Trump

Covid-19 was a once-in-a-century pandemic – and US President Donald Trump’s tariffs are also a calamity measured by that time scale. 

The International Monetary Fund (IMF) said on Tuesday that it was slashing its forecasts for global economic growth in the face of the highest tariff levels in a century and the erratic manner in which they have been implemented. 

In its latest World Economic Outlook (WEO), the IMF said it now sees the world’s gross domestic product (GDP) expanding 2.8% this year and 3.0% in 2026 – cuts respectively of 0.5 and 0.3 percentage points from its January forecast. 

For South Africa, the IMF’s assessment is grim. The Washington-based lender hacked its 2025 growth forecast by 0.5 percentage points to just 1.0% and by 0.3 percentage points for 2026 to a paltry 1.3%.

 “Since the release of the January 2025 WEO update, a series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariffs on 2 April and bringing effective tariff rates to levels not seen in a century,” the IMF said. 

“The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.”