The IMF’s World Economic Outlook had global growth projections revised modestly higher from April. The Fund now expects global growth to ease from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026.
The update shows mixed regional outlook. The U.S. economy is projected to grow 2.0% in 2025 and 2.1% in 2026. Eurozone is expected to grow only 1.2% in 2025 and 1.1% in 2026. The U.K. is forecast to expand at a steady 1.3% pace in both years, while Japan’s growth is seen slowing from 1.1% to 0.6%. Meanwhile, China’s output is expected to decelerate from 4.8% in 2025 to 4.2% in 2026.
Despite the incremental upgrades, the balance of risks remains tilted to the downside. The IMF warned that prolonged geopolitical uncertainty, rising protectionism, and labor supply shocks could further constrain growth, while fiscal vulnerabilities and potential market corrections pose threats to global financial stability. It also cautioned that a continued erosion of institutional credibility in several economies could weigh on investment and confidence.
On prices, the IMF said global inflation is set to continue moderating, but the pace will vary widely. Inflation is projected to remain above target in the US where upside risks persist.
