The International Monetary Fund (IMF) has raised its 2025 global growth forecast to 3.2 percent, up from 3.0 percent in July.
In its World Economic Outlook (WEO) report released Tuesday, the Fund credited resilient business activity and fiscal support for the improvement.
IMF Chief Economist Pierre-Olivier Gourinchas said the global economy had absorbed recent trade shocks better than expected. He noted that private-sector adaptation helped limit the economic fallout of President Donald Trump’s tariffs.
“The growth impact of the trade shock remains modest,” Gourinchas said. “The private sector adjusted fast, supporting growth.”
He added that the AI boom and policy spending in Europe and China also fueled recovery. However, he warned that global risks remain high due to renewed trade frictions.
Since returning to office, President Trump has imposed sweeping tariffs on key trade partners, including China and the European Union.
Over the weekend, he threatened new 100 percent tariffs on Chinese goods. The move came after Beijing tightened export controls on rare earth minerals vital for defense and tech industries.
Gourinchas described the situation as “fluid,” stressing that trade uncertainty can escalate anytime and disrupt growth momentum.
The IMF expects global inflation to remain elevated at 4.2 percent in 2025 and 3.7 percent in 2026. The Fund said sustained inflation in major economies continues to pressure global prices.
The United States received a slight upgrade, with growth projected at 2.0 percent in 2025 and 2.1 percent in 2026. Despite this, it marks a slowdown from 2.8 percent in 2024.
Economists project that China’s growth will slow to 4.8 percent in 2025 and 4.2 percent in 2026. Domestic demand remains strong, supported by government stimulus.
The IMF raised India’s forecast to 6.6 percent and expects Japan’s economy to grow by 1.1 percent.
The Eurozone will likely grow 1.2 percent in 2025 and 1.1 percent in 2026, reflecting mild recovery.
Germany will rebound with 0.2 percent growth this year, and France will rise from 0.7 to 0.9 percent by 2026.
Spain remains an outlier with robust growth of 2.9 percent in 2025 and 2.0 percent in 2026.
The United Kingdom should maintain 1.3 percent growth in both 2025 and 2026.
In contrast, Russia will slow sharply to 0.6 percent in 2025, down from 4.3 percent in 2024, as the war in Ukraine drags on.
The IMF believes the global economy remains resilient but vulnerable. Fiscal discipline, innovation, and cooperation have supported recovery, yet inflation and trade disputes still threaten progress.
“Trade tensions can flare up anytime,” Gourinchas warned. “Governments must stay alert and act fast when they do.”
