• The IMF has revised its U.S. economic growth forecast for the fourth quarter of 2025 downward from a previous projection of 1.9%.
  • The partial government shutdown is cited as a key factor, suppressing government spending and increasing uncertainty.
  • Weaker-than-expected domestic activity and inflation remaining above target compound the economic challenges.

In a move that underscores the tangible economic cost of political gridlock, the International Monetary Fund has officially marked down its growth expectations for the U.S. economy in the final quarter of 2025. The Fund now anticipates a deceleration, adjusting its forecast from the 1.9% growth previously anticipated.

The revision, detailed in the latest World Economic Outlook, points directly to the recent partial federal government shutdown as a primary drag. The shutdown has directly delayed federal expenditures and, more broadly, cast a pall of uncertainty over business and consumer sentiment. "The adjustment reflects weaker-than-expected domestic activity, increased uncertainty, and ongoing policy-related disruptions," the report stated, according to people familiar with its findings.

This is not the first time fiscal brinkmanship in Washington has prompted a warning from the international lender. The IMF has a documented history of cautioning that such political instability poses a risk to both domestic and global economic stability. The immediate impact is a modest but noticeable softening of growth momentum heading into the new year, with some risk of weak spillover into early 2026 if political uncertainty is not swiftly resolved.

Compounding the issue is the persistent challenge of inflation, which remains stubbornly above the Federal Reserve's target. This creates a complex policy environment where restoring fiscal predictability is paramount. The IMF has stressed the importance of credible and transparent policies to rebuild confidence. A swift resolution to the current impasse could see a rebound, economists note, but repeated disruptions would likely amplify the negative effects and potentially erode long-term fiscal credibility.

Efforts to reach the U.S. Treasury Department for comment were not immediately successful. The downgrade for the U.S. comes even as the IMF has slightly raised its global growth projections for 2025, highlighting the unique domestic policy challenges facing the world's largest economy.