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A security guard stands outside a building in Washington, DC, where signs are displayed for the upcoming International Monetary Fund/World Bank Spring Meetings, scheduled for April 17, 2025.
On Tuesday, the International Monetary Fund (IMF) announced a revision of its growth projections for key Asian economies in 2025, citing ongoing trade conflicts and substantial “high policy uncertainty” as major factors influencing this decision. The IMF has reduced its GDP estimates for China and India to 4% and 6.2%, respectively, lowering them from previous forecasts of 4.6% and 6.5% made in January.
China has set an official GDP growth target of “around 5%” for 2025, while India’s GDP growth is anticipated to reach 6.5% for the fiscal year spanning April 2025 to March 2026.
Additionally, Japan’s growth forecast has been adjusted down to 0.6%, a decrease from an initial estimate of 1.1%. Japan’s own growth target for the 2025 fiscal year is also set at 1.1%.
Globally, the IMF has revised its growth estimate down to 2.8% from 3.3% for the entire year of 2025. The organization indicated that tariffs imposed by the United States and its trading partners represent a “major negative shock” to growth prospects.
The IMF also noted that the unpredictable nature of these tariff measures negatively affects economic activities and forecasts, complicating reliable projections. This forecast aligns with a broader trend in which research firms and financial institutions are downgrading growth estimates for Asian economies.
Earlier in April, economists at Goldman Sachs revised their forecast for China’s GDP down to 4.0% from 4.5%, which they attributed to the repercussions of increased U.S. tariffs on Chinese products. Similarly, Natixis adjusted its forecast for China’s GDP to 4.2% from 4.7%.
Fitch Ratings also lowered its growth outlook for India to 6.2% from 6.3%, pointing to a deteriorating global economic landscape resulting from the escalating U.S.-China trade conflict.
Since his inauguration on January 20, U.S. President Donald Trump has introduced tariffs on steel, aluminum, and automobiles, and on April 2, he announced extensive “reciprocal” tariffs affecting nearly all countries. However, just a week later, he suspended these tariffs but maintained a baseline duty of 10% on imports from all nations except China.
The back-and-forth tariff exchanges have led to U.S. tariffs on certain Chinese products reaching as high as 245%, while China retaliated with tariffs as high as 125% on U.S. imports, pledging to “fight to the end.”
In contrast, Japan and India have adopted a more conciliatory approach regarding their negotiations with Trump. Japan has sent a trade delegation to engage in discussions with U.S. officials. On April 17, President Trump celebrated “big progress” in trade negotiations, but Japan’s chief negotiator, Ryosei Akazawa, returned without a deal, emphasizing to the U.S. the negative impact of the tariff measures and urging a reconsideration of these policies.
For India, Prime Minister Narendra Modi met with U.S. Vice President JD Vance, and their discussions resulted in a report stating that both leaders recognized the “significant progress in negotiations for a mutually beneficial India-U.S. Bilateral Trade Agreement.”
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