FX.co ★ IMF Lifts GDP Growth Outlook, Warns of Lingering Risks

The International Monetary Fund (IMF) has updated its global economic growth projections, estimating an increase to 3.0% in 2025 and 3.1% in 2026. These figures mark a slight upward adjustment from its earlier predictions made in April 2025, with revisions of 0.2 percentage points for 2025 and 0.1 percentage points for 2026. This adjustment reflects unexpectedly robust early economic performance, spurred by the anticipation of heightened tariffs, lower-than-anticipated U.S. tariff rates, improved financial conditions partly due to a weaker U.S. dollar, and fiscal expansion across multiple significant economies. However, the IMF cautions that potential risks still skew negatively. An increase in tariff levels or an inability to secure enduring trade agreements could potentially suppress growth. Specific growth estimates for major economies include the United States at 1.9% in 2025 and 2.0% in 2026, the Eurozone at 1.0% and 1.2%, and the United Kingdom at 1.2% and 1.4%. China's growth projection has been increased to 4.8% for 2025 and 4.2% for 2026, while Japan is expected to exhibit more modest growth rates of 0.7% and 0.5%, respectively. Concurrently, global inflation is projected to decrease to 4.2% in 2025 and 3.6% in 2026, although it is likely to remain above target levels in the United States.