Catenaa, Monday, January 20, 2025- The International Monetary Fund (IMF) projects global economic growth of 3.3% in 2025 and 2026, below the pre-pandemic average of 3.7%, according to its January 2025 World Economic Outlook Update.1
While US growth is expected to remain strong, prospects for other major economies have dimmed due to heightened policy uncertainty and economic headwinds.
Global inflation is forecast to decline to 4.2% in 2025 and 3.5% in 2026, with advanced economies reaching target levels sooner than emerging markets and developing nations.
However, the IMF warns that policy-driven disruptions to disinflation efforts could derail easing monetary policies, potentially threatening fiscal sustainability and financial stability.
The medium-term outlook is fraught with risks. The IMF notes that while US growth may exceed expectations in the short term, downside risks prevail in other countries. These include geopolitical tensions, uneven recovery trajectories, and domestic policy uncertainties.
To mitigate these challenges, the IMF emphasizes the importance of structural reforms, rebuilding economic buffers, and enhancing multilateral cooperation.
Balancing inflation management with real economic activity will be critical to sustaining growth while maintaining fiscal discipline.
- https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025[↩]
