World Economy to Grow 3.2% in 2025, 3.1% in 2026 – IMF Forecasts in Global Economic Outlook Report
The International Monetary Fund (IMF) has projected global growth at 3.2 percent in 2025 and 3.1 percent in 2026, representing a cumulative downgrade of 0.2 percentage points from its forecast a year earlier.
In its 2025 Global Economic Outlook, the Fund attributed the downgrade to the lingering effects of recent US tariff measures, tightening fiscal conditions, and structural challenges in major economies.
According to the IMF, the initial fears of a severe global slowdown from the United States’ sweeping tariff increases have so far not materialised, largely due to targeted trade exemptions, limited retaliation from trading partners, and private sector adaptability.
“The increase in tariffs and its effect has been smaller than expected so far,” the IMF noted, adding that “most countries refrained from retaliation, keeping the trading system largely open.”
However, the Fund cautioned that it would be “premature and incorrect” to conclude that the tariff shock has had no impact on global growth. The report warned that persistent trade tensions, elevated tariffs, and tighter immigration policies in the United States could lead to permanent trade rerouting and efficiency losses.
The IMF further highlighted that despite tariff-related shocks, a combination of domestic and global factors has helped cushion the impact.
