IMF cuts GDP growth forecasts for China to 4.0%; India to 6.2%

SINGAPORE (ICIS)–The International Monetary Fund (IMF) has cut its growth forecasts for China, India and other developing Asian economies following latest escalation in US-led trade war.

For China, the forecast growth was revised down to 4.0% from 4.6% previously, representing a sharp deceleration from the pace of expansion in 2024, according to the IMF’s latest World Economic Outlook (WEO) report released on 22 April.

Last year, the world’s second-biggest economy expanded by 5.0%, in line with the Chinese government’s target.

“This reflects the impact of recently implemented tariffs, which offset the stronger carryover from 2024 (as a result of a stronger-than-expected fourth quarter) and fiscal expansion in the budget,” the IMF said.

China’s growth in 2026 was also revised down to 4.0% from 4.5% previously “the back of prolonged trade policy uncertainty and the tariffs now in place”.

India’s GDP growth this year is also expected to come in lower, at 6.2%, down from the previous forecast of 6.5%, on account of higher levels of trade tensions and global uncertainty, the IMF said.

The south Asian giant’s 2025 growth, nonetheless, remains comparatively higher than the rest of the region, supported by private consumption, particularly in rural areas, it added.

For emerging and developing Asia, growth is expected to decline further to 4.5% in 2025 and 4.6% in 2026, after a marked slowdown in 2024.

“Emerging and developing Asia, particularly Association of Southeast Asian Nations (ASEAN) countries, has been among the most affected by the April tariffs,” the IMF said.

Growth for the ASEAN-5 – which consists of Indonesia, Malaysia, the Philippines, Singapore, Thailand – for 2025 was revised down to 4.0% from 4.6% previously.

In the near term – under a reference forecast which includes tariff announcements between 1 February and 4 April by the US and countermeasures by other countries – global growth is projected to slow down to 2.8% in 2025 (from 3.3% in 2024) before accelerating to 3.0% in 2026.

“Risks to the global economy have increased, and worsening trade tensions could further depress growth,” IMF chief economist Pierre-Olivier Gourinchas said.

Risks to the global economy have increased, and worsening trade tensions could further depress growth, he said.

“Growth prospects could, however, immediately improve if countries ease their current trade policy stance and forge new trade agreements.

“Addressing domestic imbalances can, over a period of years, offset economic risks and raise global output while contributing significantly to closing external imbalances…It also means boosting support for domestic demand in China, and stepping up fiscal consolidation in the United States,” Gourinchas said.

Thumbnail image shows IMF Chief Economist Pierre-Olivier Gourinchas speaking at a press briefing (Source: Xinhua/Shutterstock)

Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.