The prospects for the U.S. economy keep getting worse.

In its March outlook, the Organisation for Economic Co-operation and Development downgraded its forecast for U.S. GDP growth in 2025 from 2.4% (as of its December outlook) to 2.2%.

Yesterday, another international organization—the International Monetary Fund (IMF)—also downgraded its forecast for U.S. economic growth this year, dropping it 0.9 points from 2.7% (as of its January forecast) to just 1.8%. This is the largest downgrade among advanced economies.

The IMF is not forecasting a U.S. recession, but the odds of this happening have increased from 25% (as of the IMF’s October outlook) to 37%.* (J.P. Morgan is more pessimistic, pegging the odds of a U.S. recession at 60%.)

The IMF forecast is based on information available as of April 4, 2025 (including the April 2 tariffs and initial responses), so it does not reflect the 90-day pause on the reciprocal tariffs announced by the U.S. on April 9 or the escalation of the U.S.-China trade war that has seen both countries impose tariffs on each other of over 100%. (See the tariff timeline prepared by The Peterson Institute for International Economics for information on the evolving trade war.)

The global outlook has also darkened with the IMF pegging real GDP growth this year at 2.8%, down from 3.3% in its January forecast.

As for Canada, the IMF shaved 0.6 percentage points off its previous forecast with growth now expected to come in this year at just 1.4%.

The reasons given for the downgrades are not surprising: tariffs and the associated uncertainty surrounding them.

The IMF, however, doesn’t stop there and stresses that things could easily get worse: “Intensifying downside risks dominate the outlook…. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions. Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both short-term and long-term growth prospects.”

*The recession risk for 2025 is defined by the IMF as the probability that 2025 annual growth in the U.S. will be below 1.2%, consistent with a shallow recession starting in the third quarter.

Answer to the previous trivia question: There are 16 political parties registered with Elections Canada.

Today’s trivia question: How many federal electoral districts were added in 2022?