IMF trims 2025 global growth outlook to 3.2 per cent amid rising uncertainty
Global trade volumes are expected to rise by 2.9 per cent on average over the next two years, down from 3.5 per cent in 2024, while global headline inflation is set to fall to 4.2 per cent in 2025 and 3.7 per cent in 2026.
Global economic growth is expected to slow slightly in 2025, the International Monetary Fund (IMF) has said in its latest World Economic Outlook report released in October.
The IMF projects global GDP growth at 3.2 per cent in 2025, a marginal dip from 3.3 per cent in 2024, and expects the slowdown to continue into 2026 with growth easing further to 3.1 per cent.
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Despite the deceleration, the forecast represents an upward revision from the Fund’s earlier projections of 2.8 per cent in April and 3.0 per cent in July.
“On an end-of-year basis, global growth is projected to slow down from 3.6 per cent in 2024 to 2.6 per cent in 2025,” the IMF said.
The lender attributes the loss of momentum to persistent policy uncertainty, rising protectionism, and emerging labour supply constraints. While the slowdown remains modest, it warns that these structural challenges could threaten medium-term growth if not addressed.
“Prolonged uncertainty could dampen both consumption and investment,” the Fund cautioned.
Advanced economies
Growth in advanced economies is projected to remain weak at around 1.5 per cent in 2025–26, with the US economy expected to grow to 2.0 per cent.
In contrast, emerging market and developing economies are forecast to expand slightly above 4.0 per cent, helping offset slower growth elsewhere.
Global trade volumes are expected to rise by 2.9 per cent on average over the next two years, down from 3.5 per cent in 2024, while global headline inflation is set to fall to 4.2 per cent in 2025 and 3.7 per cent in 2026.
Highlighting the risks to the global outlook, the IMF urged policymakers to restore market confidence through credible, transparent, and sustainable measures.
“Trade diplomacy should be paired with macroeconomic adjustment,” the IMF said. “Fiscal buffers should be rebuilt. Central bank independence should be preserved. Efforts on structural reforms should be redoubled.”
Notably, Sub-Saharan Africa’s growth outlook remains steady at 4.1 per cent, with prospects of strengthening to 4.4 per cent by 2026.
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