Australia's growth outlook has taken a severe cut in a dire assessment of the global economy by the International Monetary Fund (IMF).
In its World Economic Outlook for April, the United Nations' financial agency said economic uncertainty has surged to unprecedented levels as a result of United States President Donald Trump's upheaval of global trade.
Australia's economic growth projection for 2025 was downgraded to 1.6 per cent from 2.1 per cent in January.
But the 0.5 percentage point trim is not as bad as the hit to the projection for US growth, which was cut from 2.7 per cent to 1.8 per cent.
Global growth is also expected to be 0.5 percentage points lower at 2.8 per cent.
Impact of US tariffs on global markets
"Major policy shifts are resetting the global trade system and giving rise to uncertainty that is once again testing the resilience of the global economy," the IMF said in the document.
Despite equity markets suffering a correction since Trump's tariff announcement on 2 April, US stocks potentially had further to fall, given price-to-earnings ratios remain at historical highs, the IMF said.
Tariffs will dominate meetings between global financial leaders gathering at the IMF and World Bank meetings in Washington this week.
Finance ministers from around the globe will be eagerly seeking meetings with Trump's lead tariffs negotiator, treasury secretary Scott Bessent, to strike a tariff exemption deal.
But a notable absentee will be Australia's Treasurer Jim Chalmers, who is tied up campaigning for the .
Chalmers said Australians would be worse off and more vulnerable to global economic uncertainty if Opposition leader Peter Dutton won the election on 3 May.
"At a time of extreme global uncertainty, our responsible approach to economic management has never been more important," he said.
"We're not immune from the turmoil in the global economy but the progress we've made together puts us in good stead."
Australian GDP growth is expected to pick up to 2.1 per cent in 2026, from 2.2 per cent projected in January.
Inflation is projected to come in 0.8 percentage points lower this year than previously forecast, at 2.5 per cent, before accelerating strongly to 3.5 per cent in 2026.
In its Global Financial Stability report, also released on Tuesday, the IMF warned stretched asset valuations and highly leveraged financial markets could amplify shocks and exacerbate economic downturns.
Financial authorities should be ready to intervene to address severe liquidity or market function stress, the IMF cautioned.
