IMF cuts Romania's 2025 growth forecast to 1.6 pct

The latest International Monetary Fund (IMF)’s says that Romania will feel the effects of this global slowdown, like the rest of the world. After a GDP growth of 0.9% last year, Romania’s economy is now expected to grow by only 1.6% in 2025, with a projected acceleration to 2.8% in 2026.   This marks a sharp downgrade from the IMF’s previous forecast, which projected a 3.3% growth rate for Romania in 2025. As for average inflation this year, the report estimates it at 4.6%, a notable increase from the 3.6% forecast published in October.   On the global level, the IMF has revised its global economic forecast down to just 2.8% growth this year, down from 3.3% in January. It says all major economies will be hit, including the US.   The US economy, for example, is expected to grow by just 1.8% this year, down from a previous estimate of 2.7%. The UK economy will also slow down, from 1.6% to 1.1%, but it will still remain the strongest economy in Europe’s G7 in 2025, the IMF said.   The IMF also revised up its inflation expectations for the US, UK and Canada to 2.5%, up 0.4% from its January forecast.   “Growth in the Eurozone, which is subject to relatively lower effective tariffs, was revised down by 0.2 percentage points to 0.8%. In both the Eurozone and China, stronger fiscal stimulus will provide some support this year and next,” the IMF pointed out.   The Fund also warned that despite a recent “pause” announced by Trump – a 90-day suspension of tariffs against other countries – the current level of trade tariffs is the highest in 100 years. Due to uncertainty, many companies around the world have already started to reduce investment and spending, and banks are more cautious about providing loans to companies.   The IMF argues that all these cause a “global negative shock”, which will lead to less demand and economic activity around the world. Developing countries are among the most exposed, especially as they face tighter international financial conditions and cuts in foreign aid. For example, the UK has cut its foreign aid budget to increase military spending, and Trump is seeking to dismantle the US foreign aid agency, USAID.   The IMF is calling for coordinated international action to reduce trade tensions, restructure the debts of poor countries and address global challenges. Meanwhile, US stock markets have started to fall again, and the IMF warns that large fluctuations in financial markets are expected, especially in terms of exchange rates – which could be difficult for weaker economies to manage.   In fact, the US dollar has reached its lowest level in the last three years, in the context of Trump increasingly criticizing the head of the US Central Bank, Jerome Powell, accusing him of acting too slowly on interest rates.