FX.co ★ IMF Sees Global Growth Slowing to 3.2% in 2025

The International Monetary Fund (IMF) anticipates a deceleration in global economic growth, forecasting a rate of 3.2% in 2025 and 3.1% in 2026, compared to 3.3% in 2024. This outlook, reported in the latest World Economic Outlook (WEO), suggests that the global economy is adjusting to increased protectionism and fragmentation. Despite the 2025 forecast being lower than pre-policy-shift levels, it represents a 0.4 percentage point improvement from the April projection, attributed to a reduction in tariff increases. Examining individual countries, the United States is projected to grow by 2.0% in 2025 and 2.1% in 2026. China's growth is expected to slow to 4.8% in 2025 and 4.2% in 2026. Growth in the Euro Area is anticipated to be 1.2% and 1.1% for each of those years, respectively; the United Kingdom is expected to see a consistent growth rate of 1.3% in both years; and Japan is forecasted at 1.1% and then slowing to 0.6%. On the other hand, global inflation is projected to continue its downward trend, albeit with differing patterns across countries. In the United States, inflation is anticipated to stay above targeted levels, with potential upward risks, while it is expected to remain low in other regions.