IMF lifts global growth outlook in 2025

Logo of International Monetary Fund (IMF)

The International Monetary Fund (IMF) edged up its 2025 global growth forecast, while leaving its projections for 2026 unchanged, noting that while "the rules are fluid," uncertainty is receding and policies are becoming clearer over time.

The IMF now predicts global real GDP growth at 3.2% for 2025, up from a July forecast of 3.0% and a more severe April forecast of 2.8% that came after Trump imposed broad global "reciprocal" tariffs and a tit-for-tat escalation with China ensued. It sees global growth at 3.1% in 2026, unchanged from the July forecast.

However, the projected growth for this year represents a slight slowdown from the 3.3% rate recorded in 2024 and is expected to decline again to 3.1% in 2026, according to the Fund's estimates.

The report stated that agreements and discussions between the US and its trading partners have eased trade-related concerns, but that "uncertainty about the stability and path of the global economy remains significant."

The Fund raised its growth forecast for the US to 2% this year, compared to 1.9% in its July estimate, and raised its growth forecast for Saudi Arabia to 4% from 3.6%, while leaving China's growth forecast unchanged.

In its April report, the Fund lowered its global growth forecast for 2025 by 0.5 percentage points to 2.8%, due to shifts in trade policy and heightened uncertainty, amid concerns that tariffs could cause supply and demand shocks.

Despite the improved outlook in the October report, the Fund stated that "this apparent resilience is largely attributable to temporary factors—such as prior focus on trade and investment and inventory management strategies—rather than to strong fundamentals."

Inflation is projected to decline to 4.2% globally in 2025 and to 3.7% in 2026, with significant variations: inflation is above target in the US—with risks skewed to the upside—and inflation is subdued in most parts of the world.

Global trade volume will grow at an average rate of 2.9% in 2025-26, still significantly slower than the 3.5% rate recorded in 2024, with continued trade fragmentation limiting gains.