Emerging and Developing Economies Projected to Grow by 3.7% in 2025, Says WEO Report
The International Monetary Fund (IMF) has downgraded its global economic growth forecasts, citing mounting policy uncertainties, intensifying trade tensions, and waning consumer demand as key downside risks to recovery efforts.
According to the April 2025 edition of the Fund’s World Economic Outlook (WEO) report, economic expansion in Emerging Market and Developing Economies (EMDEs) is projected to slow to 3.7% in 2025, before picking up slightly to 3.9% in 2026. The revised projections represent a notable deceleration from the robust momentum these economies recorded in previous years.
Advanced economies are also set to experience subdued growth, with aggregate economic activity forecast at 1.4% in 2025. The United States, the world’s largest economy, is expected to grow at 1.8%—a sharp downward revision of 0.9 percentage point compared to the Fund’s January 2025 update.
In the euro area, growth is similarly forecast to decelerate, with the IMF revising its 2025 outlook downward by 0.2 percentage point to 0.8%, reflecting the impact of weak industrial output and persistent inflationary pressures.
On the global scale, the IMF now expects output to expand by 2.8% in 2025 and 3.0% in 2026. These forecasts are significantly lower than the earlier projections of 3.3% for both years as published in the Fund’s January 2025 WEO Update.
“The global economy is entering a phase of heightened vulnerability, shaped by tightening financial conditions and escalating geopolitical tensions,” the IMF noted in the report.
The Fund warns that unless governments implement targeted policy interventions to restore market confidence and boost domestic demand, growth prospects could weaken further.
The latest downgrade by the IMF adds to growing concerns among policymakers and investors about the resilience of the global economy in the face of evolving macroeconomic challenges.
