By Matik Kueth
The International Monetary Fund (IMF) ‘s chief economist, Pierre-Olivier Gourinchas, has cautioned that interruptions to global supply chains induced by uncertainties over tariff hikes and trade disputes could exacerbate an already complicated economic backdrop.
Gourinchas’ warning followed the IMF’s recent downgrade of its global economic growth forecasts, which were disclosed in the World Economic Outlook report on Tuesday.
In a statement, Gourinchas mentioned that some frictions may become magnified along supply chains.
“As you have this uncertainty about tariffs and trade relations, some of these frictions could get amplified along the supply chains. You don’t know if your suppliers are going to be there. You don’t know if your customers are going to be there. The supply chain may have to be reoriented. That injects another layer of uncertainty into a situation that’s already quite complex,” Gourinchas said.
The IMF has lowered its global growth forecast for 2025 to 2.8 percent, down 0.5 percentage points from its January projection. Growth is expected to slow further to 3 percent in 2026.
This downward revision follows the United States’ announcement of sweeping “reciprocal tariffs” on April 2, which has driven global tariff rates to their highest levels in a century, creating what the report describes as “a major negative shock” to global economic growth.
Advanced economies are encountering significant challenges, with combined growth projected at only 1.4 percent in 2025 and 1.5 percent in 2026. The United States experienced the steepest downgrade, with its 2025 forecast cut by 0.9 percentage points to 1.8 percent, amid growing policy uncertainty, escalating trade tensions, and weakening domestic demand.
The report warns that if trade tensions escalate further, global growth could face a steep decline and trigger significant volatility in financial markets.
The IMF urges countries to enhance dialogue, stabilize trade policies, and uphold the independence of monetary policies to strengthen global economic resilience and prevent the accumulation of risks that could lead to uncontrollable situations.