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Pierre-Olivier Gourinchas speaks during a press briefing on the World Economic Outlook during the 2025 World Bank and IMF Spring Meetings on April 22, 2025 in Washington, DC.
IMF downgrades growth outlook
“Just since January, we’ve entered into a new era,” IMF’s Chief Economist Pierre-Olivier Gourinchas told the press Tuesday at the Spring Meetings of the International Monetary Fund and World Bank. He explained why the IMF had just downgraded global economic growth expectations for 2025, from 3.3% to 2.8%, and global trade growth by more than half, from 3.8% last year to 1.7%.
Why? Global tariff rates are at their highest level since the Great Depression, following Donald Trump’s imposition of a 10% tariff on nearly all imports, along with duties of at least 145% on Chinese goods entering the United States. In a closed-door session with investors at a JP Morgan conference on Tuesday, US Trade Secretary Scott Bessent said that while the US will eventually de-escalate the trade war with China, negotiations with Beijing have yet to begin — and the process, he warned, will be a “slog.”
But an eventual de-escalation won’t alleviate concerns. “Beyond the tariffs themselves, the surge in policy uncertainty — related to trade policy but also more broadly — is a major driver of the economic outlook,” Gourinchas said. As a result, the US saw the sharpest downgrade among wealthy economies, with its expected 2025 growth falling from 2.7% to 1.8%.
Gourinchas notes that the downgrade could be temporary — if tariffs are rolled back and policy stability returns — but the IMF has raised the likelihood of a US recession this year to 40%, up from 25%.
All eyes are now on signals from the White House. Anticipation is building for Wednesday, when the Trump administration is expected to officially weigh in — and potentially upend the conversation. The administration has been hostile to international organizations like USAID and the United Nations, and some fear that the World Bank or the IMF could be next on the chopping block. Bessent is set to address the Institute of International Finance in the morning, followed by a high-stakes dinner with G20 leaders that evening.
GZERO will be watching to see how he responds to the IMF’s downgrade — and whether he offers any guidance to the institution itself. Some expect the Trump administration to urge the IMF to return to its traditional focus on balance of payments and debt crises, moving away from more progressive initiatives like supporting climate adaptation or promoting gender equality.
Rescue personnel walk near a building that collapsed after a strong earthquake struck central Myanmar on Friday, March 28, 2025.
Hard Numbers: Major earthquake strikes Southeast Asia, Israel passes judicial reform, Fox News wins advertisers, Pollution kills, HHS sees massive job cuts, Suspected US strikes hit Houthis
7.7: Two disastrous earthquakes, the first of 7.7 magnitude, struck Myanmar on Friday, destroying vital infrastructure across Southeast Asia. Videos of a collapsed bridge in Mandalay, Myanmar, and a fallen building in Bangkok, Thailand, have emerged. The number of casualties isn’t yet known, although several are feared trapped under a fallen skyscraper in the Thai capital. At least 144 people have been confirmed dead.
71,000: Israel’s right-wing government on Thursday passed a contentious law to allow politicians greater sway in judicial appointments, despite some 71,000 opposition amendments. The move is a part of the judicial overhaul that protesters have been fighting for over a year and comes amid Prime Minister Benjamin Netanyahu’s corruption trial.
125: Since the US election, Fox News has gained 125 new high-profile advertisers as Rupert Murdoch’s cable network continues to draw soaring viewership during President Donald Trump’s second term. Businesses such as Amazon, GE Vernova, JPMorgan Chase, Netflix, and UBS have recently run ads on Fox News for the first time in over two years.
5.7 million: According to a new World Bank study, 5.7 million people are killed annually by air pollution. The global institution is calling on countries to take an integrated approach to halve the number of people breathing unhealthy air by 2040 and points to places like Mexico City, which has successfully curbed pollution, and Egypt and Turkey, which have put financing mechanisms in place to support emission reduction.
20,000: The Trump administration announced Thursday that it will cut 20,000 positions from the Department of Health and Human Services – 10,000 from job cuts and 10,000 from voluntary departures – as part of a major restructuring that its chief, Robert F. Kennedy Jr., says “will do more — a lot more — at a lower cost to the taxpayer.” RFK says the reorganization is intended to help the department prioritize the fight against chronic diseases, but critics fear it could hinder the critical agency, which includes Medicare and the Federal Drug Administration. And throughout the federal government, officials are planning for between 8% and 50% staff cuts, according to an internal White House document obtained by the Washington Post.
19: Two weeks after the Trump administration dropped its first bombs on Houthi rebels in Yemen — details of which were revealed over the now-infamous Signal chat — the United States is believed to have attacked again early Friday, firing at least 19 strikes. The extent of the damage is unclear, although the intensity of the bombardment has increased since the Biden administration first started pounding the Houthis.
IMF Managing Director Kristalina Georgieva speaks to the media during an International Monetary and Financial Committee press briefing on Friday, Oct. 25, 2024.
IMF and World Bank close annual meetings with urgent call for fragile economies
“The world now faces a low-growth, high-debt trajectory,” said Georgieva. Governments in developing countries now face a “trilemma” of needing to increase spending – sometimes by as much as 14% – while being unable to raise tax revenues as they face fiscal buffers exhausted by the COVID-19 pandemic and its aftermath. And she acknowledged that the Fund’s projections include “a severe, but plausible scenario” in which global public debt could exceed the baseline by some 20%.
That risk is compounded by growing political opposition to free trade, which Georgieva characterized as a “retreat from global economic integration driven by both national security concerns and the anger of those who lost out.” Reduced trade will hamper growth and push countries to borrow more to make up the difference.
These pressures pose the highest risk for sub-Saharan Africa, already struggling with high debt and lacking the levels of growth necessary to get ahead. Speaking at a separate event on Friday, the IMF’s Africa Director Abebe Selassie said the region will likely grow by 4.2% in 2025, well below the 6-7% growth rates enjoyed previously. “This pace is not sufficient to significantly reduce poverty or to recover ground lost in recent years, let alone address the substantial developmental challenges ahead,” he said.
So what can be done? World Bank President Ajay Banga gave an introspective prescription at the closing plenary: Simplify, simplify, simplify. “Development delayed is development denied,” he explained while outlining progress on reducing the time the World Bank takes to approve projects from an average of 19 to 12 months, and faster where possible. The Bank has made a substantial improvement — they’re down to 16 months — but time is money, as the saying goes, and more haste will make the Bank’s programs more effective in Banga’s view.
On the IMF’s side (often more concerned with stabilization than development), Georgieva outlined three tools: rebuilding fiscal buffers in vulnerable economies, investing in growth that can ease debt burdens, and taking a cooperative approach across borders.
Of course, much depends on factors outside the control of these development finance institutions. We’re watching how the results of the US election, the roiling debt and property market problems in China, and the conflicts in Ukraine, the Levant, Sudan, and elsewhere affect the outlook.
Hot topics at the IMF-World Bank meetings
Delegates at the IMF and World Bank Annual Meetings have been giving rosy outlooks to the press while the cameras are rolling, but GZERO Senior Writer Matthew Kendrick heard a different story in private settings. He told Tony Maciulis that the global outlook depends heavily on US policy continuity — which is highly unlikely under a second Trump administration — and successful efforts in China to revive its own floundering economy.
It’s not all doom and gloom, though. Delegates are eager to point to success stories, including in Ukraine and Sub-Saharan Africa, highlighting how the world’s leading development banks can make a real impact on some of the most fragile economies and vulnerable populations.
Watch to learn more about what Matt heard on the ground.
Watch more from Global Stage.
Global economy at risk if Middle East conflict expands, says World Bank's Ayhan Kose
While the global economy shows signs of growth and decreasing inflation, the near future involves risks, including the escalation in the Middle East impacting oil prices, strained China-US relations, and an increasingly challenging tariff and trade environment, said Ayhan Kose, World Bank Deputy Chief Economist. He discussed the geopolitical tensions influencing the global economy with GZERO's Tony Maciulis at the IMF and World Bank Annual Meetings in Washington, DC, in a GZERO Global Stage interview. Kose also addressed the other major economic gathering happening this week: Russia’s 16th annual BRICS Summit in Kazan, Russia, largely seen as a counterweight to Western-led order. While acknowledging the widening economic and geopolitical divide, Kose emphasized the need for international cooperation. He expressed concern about “the increase in the number of protectionist measures and consequences of that for global trade.” Kose also emphasized the "urgent and important" need for World Bank member nations to continue to support development in poorer countries, a more difficult conversation today as many face their own economic headwinds and the world awaits the results of the 2024 US presidential election.
Ukrainian central bank head Andriy Pryshnyy (right) at the 2024 IMF/World Bank Annual Meetings in Washington, DC. Oct. 23, 2024
Ukraine secures fifth round of IMF funding, but less talk of reconstruction
The International Monetary Fund announced Wednesday that Ukraine had successfully completed the fifth revision of its financing program and will receive $1.1 billion to support its non-military budget. This is a major achievement for Kyiv and has required extensive reforms while at war. It’s a war that has not gone well in the last year to boot, and talk about reconstruction — and the IMF and World Bank’s roles therein — has diminished as a result.
Notably absent from this year’s IMF/World Bank Annual Meetings is a marquee discussion of funding for Ukraine’s reconstruction efforts. IMF Managing Director Kristalina Georgieva wrote that Ukraine’s “recovery is expected to slow amid headwinds from the impact of the attacks on energy infrastructure and the continuing war, while risks to the outlook remain exceptionally high.”
Ukraine’s central bank chief Andriy Pyshnyy emphasized the importance of contingency planning under such circumstances, and continuing reforms even if the military situation worsens. Ultimately, they will help Ukraine meet the standards necessary to join the EU — and Kyiv sees greater integration with the West as the best, if not only, way to achieve long-term security.
“Uncertainty is our new reality,” said Pyshnyy at a press event on Wednesday. He credited the IMF’s responsiveness and his own staff’s grit in helping the country overcome panic and anxiety when Russia invaded, and he has set in motion plans to increase the country’s financial resilience.
Maintaining public confidence in the banking system by making sure everyone can access their money when they need it is crucial to keeping the Ukrainian economy afloat. Ukraine’s banks are now capable of functioning in blackout conditions, which has prevented panic withdrawals. The violence has also left many Ukrainians disabled, which has led to changes Pyshnyy said he hopes will lead Ukraine’s “financial system to be the most accessible in the world.”
“We believe in our victory,” said Pyshnyy. “We believe that tomorrow can be better than today.”
Signage for the International Monetary Fund (IMF) and World Bank Group (WBG) 2024 Annual Meetings is seen at the IMF secondary headquarters, in Washington, D.C., on Monday, October 21, 2024.
Has the world made progress in tackling poverty?
The last time the World Bank and International Monetary Fund held their landmark conference in April, speakers placed great emphasis on each institution’s role in helping the world’s poorest people get a leg up. Not an easy task by any measure — particularly with geopolitics interfering — so just ahead of the release of their latest World Economic Outlook for this week’s Annual Meetings, how have things gone?
Soft landing for rich countries, rocky shores for poor ones. The topline number for global economic growth is deceptive: At 2.6%, the projection seems pretty meh — not great but hardly a catastrophe, particularly if inflation stays under control. Scratch the surface, though, and you’ll find that the world’s 26 poorest countries are deeper in debt than at any time since 2006 while development aid from rich countries has fallen to its lowest level since 2003. The World Bank, in particular, will need to find creative ways to help these most vulnerable economies climb the development ladder.
Electrifying Africa. The flagship program launched at the Spring Meetings in April, a $90 billion effort to bring electricity to some 300 million people across the continent, will also be discussed. “Mission 300” is off to a promising start: The World Bank has allocated $750 million to building rooftop solar and mini-grids in Nigeria, which could bring electricity to nearly 18 million people in Africa’s most populous nation. They’ve also launched 15 smaller projects across 11 other countries in a similar vein, and a summit on the next steps is planned for January in Dar es Salaam.
Bailouts make progress. As the lender of last resort, the International Monetary Fund has to tackle the toughest cases of financial collapse, which was heavily exacerbated by the pandemic. Fortunately, their five largest bailout programs (Argentina, Egypt, Ukraine, Pakistan, and Ecuador) are all on relatively stable fiscal footing, though geopolitical risks remain threats, particularly for Kyiv and Islamabad.
FILE PHOTO: MF Managing Director Kristalina Georgieva speaks during a press briefing at the International Monetary and Financial Committee (IMFC) plenary session at the IMF and World Bank?s 2024 annual Spring Meetings in Washington, U.S., April 19, 2024.
Building a better world: GZERO on the ground at IMF and World Bank Annual Meetings
The great and the good of international development are in Washington, DC, this week for the most important event on their annual calendar: the World Bank and International Monetary Fund annual meetings. Heavy hitters like World Bank President Ajay Banga and IMF Managing Director Kristalina Georgieva will discuss the world’s economic outlook in 2025, while central bank heads from some of the most fragile economies will discuss their successes and challenges.
Ukraine’s central bank chief will talk about how to keep his country’s economy functioning with Russian missiles raining down while young Ukrainians in their prime are fighting in trenches instead of building wealth. Pakistan’s finance minister will focus on his country’s daunting challenges, from devastating floods and massive debt to deeply divisive politics. And on a more positive note, South Africa’s central bank chief will be happy to discuss the rand’s hopeful summer turnaround – and what it could mean for the Rainbow Nation.
GZERO Senior Writer Matthew Kendrick will be rubbing elbows to broach the elephant in the room: What is everyone thinking about the US election? GZERO’s Chief Content Officer Tony Maciulis will be interviewing M. Ayhan Kose, the World Bank’s deputy chief economist, and Hana Brixi, global director of gender, among others. We’ll also cover efforts to ensure that development is spread evenly across societies and focus on women’s empowerment and health care. Don’t forget to follow Tony, Matt, and GZERO on social media to stay up to date.