The International Monetary Fund cut its 2025 growth forecast for China to 4%, down 0.6 of a point, citing rising global tariffs and trade uncertainty.

"We expect it to remain quite significant also in 2026 when we also have a downward revision by about 0.5 percentage points," said Pierre-Olivier Gourinchas, director at the IMF's research department.

Gourinchas added that elevated tariffs are dragging China's economy, slicing 1.3 points off growth before a partial recovery from fiscal support. Inflation is also projected to hit zero, down from 0.8%, heightening deflation risks.

This comes as Beijing reports a more optimistic 5.4% Q1 growth, which the IMF said came too late for inclusion. The ongoing tariff squeeze is rippling across global supply chains, curbing investment and trade flows worldwide.