International Monetary Fund (IMF) has revised its global economic growth projection upward to 3.2 percent for 2025, while a slight slowdown to 3.1 percent is anticipated in 2026.
Gatekeepers News reports that the updated forecast was released on Tuesday during the presentation of the IMF’s World Economic Outlook (WEO) report.
The new figures mark an improvement from the April projections of 2.8 percent for 2025 and 3 percent for 2026, though the institution cautioned that growth still lags behind pre-policy-shift expectations.
The adjustment comes amid escalating trade tensions following U.S. President Donald Trump’s announcement of 100 percent tariffs on Chinese imports on October 11, signaling a renewed phase in the U.S.-China trade war.
The report stated, “The global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets.”
“But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025—such as front-loading—are fading.”
According to IMF, advanced economies are currently expanding by about 1.5 percent, while emerging and developing markets are expected to grow at slightly above 4 percent.
The Fund also projected that inflation will continue its downward trend globally, although outcomes differ across regions. It remains above target in the United States, where risks are “tilted to the upside,” but is relatively subdued elsewhere.
Highlighting ongoing challenges, IMF warned that risks are tilted to the downside. Factors such as prolonged uncertainty, growing protectionism, labor shortages, and fiscal vulnerabilities could undermine global stability.
The report urged governments to rebuild fiscal buffers, strengthen institutions, and maintain central bank independence to restore market confidence.
The IMF further emphasised that trade diplomacy must go hand-in-hand with macroeconomic reforms and structural adjustments to safeguard sustainable global recovery.
