IMF Upgrades Global Growth Projections to 3 Percent
(MENAFN) The International Monetary Fund (IMF) has upgraded its global economic growth projections, now forecasting a 3% expansion in 2025 and a slightly stronger 3.1% in 2026.
According to the July edition of its World Economic Outlook released Tuesday, the IMF raised its 2025 global growth forecast by 0.2 percentage points compared to its April projections. The estimate for 2026 was also nudged upward by 0.1 percentage points.
Back in April, the IMF had projected global growth at 2.8% for 2025 and 3% for 2026.
The IMF attributed the improved outlook to unexpectedly resilient demand. This was fueled by anticipation of high tariffs, actual average tariffs being lower than initially signaled in April, looser financial conditions due to a weakening U.S. dollar, and increased government spending in key economies.
Still, the report flagged persistent downside risks.
Headline global inflation is forecast to ease to 4.2% in 2025 and further to 3.6% in 2026—figures consistent with April’s estimates. However, inflation is expected to remain above central bank targets in the U.S., while staying more subdued in other leading economies.
The IMF cautioned that risks to global growth remain tilted to the downside. Higher-than-expected effective tariff rates could restrain growth further, while economic uncertainty may begin to weigh more heavily on business and consumer activity.
It also warned that heightened geopolitical tensions could disrupt supply chains and elevate commodity prices. In addition, larger fiscal deficits or rising risk aversion might push up long-term interest rates, tightening global financial conditions.
On a more optimistic note, the IMF said global growth could accelerate if trade negotiations succeed in establishing a more predictable framework and if tariffs are scaled back.
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