The IMF predicted “stable, albeit lacklustre” global growth of 3.3% in both 2025 and 2026, below a historical average of 3.7%.

Its 2025 forecast was largely unchanged from a previous one, mainly because it expects higher US growth than previously predicted to offset lower growth in other major economies.

The imminent arrival of Trump in the White House dominates the section on risks in the IMF’s twice-yearly forecast for the world economy.

When he was last in power, Trump launched into a trade war with China, and US policy led to tit-for-tat tariffs with the EU.

This time round, Trump has proposed a 10% tariff on global imports, a 25% duty on imports from Canada and Mexico, and a 60% tariff on Chinese goods.

It warns that an inflationary US boom could be followed by a possible bust that would potentially “weaken the role of US Treasuries as the global safe asset”.

Investors see US Treasury securities as one of the safest possible bets, because the bonds – which are kind of like an IOU – are backed by the US government.

In addition, if red tape on business is cut too much, this could lead to a runaway dollar that could suck money out of emerging economies, depressing global growth.

Trump going ahead with deportations of illegal immigrants could “permanently reduce potential output” and also raise inflation, The IMF said.

Its chief economist, Pierre-Olivier Gourinchas, said “tremendous uncertainty” about Trump’s future policies was already affecting stock markets around the world.

On Thursday, the World Bank also warned that US tariffs could hit trade and depress global growth this year.

The bank predicts global growth of 2.7% in 2025, which would be the weakest performance since 2019, aside from the sharp contraction seen at the height of the Covid pandemic.