The International Monetary Fund (IMF) has forecast a slowdown in global economic growth from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026, warning that rising protectionism and policy uncertainty could weigh on recovery.
Presenting the IMF’s October World Economic Outlook in Washington on Tuesday, Tobias Adrian, the Fund’s Financial Counsellor, said advanced economies were likely to grow by around 1.5%, while developing economies would expand slightly above 4%.
He said inflation was expected to keep falling overall but remain above target in the United States.
“The global economy is adjusting to a landscape reshaped by new policy measures,” Adrian said, adding that recent tariff hikes and fading temporary factors had dampened growth momentum.
Adrian identified downside risks including fiscal fragilities, market corrections, and geopolitical tensions, and urged policymakers to restore confidence through transparent and sustainable measures.
He also noted that the global impact of US tariffs announced in April had been smaller than initially feared, with loose financial conditions and strong investment — particularly in AI and technology — cushioning the slowdown.
However, he cautioned that the outlook remains fragile, saying new trade disruptions could trim global output by up to 0.3 percentage point.
Comparing the current tech investment surge to the dot-com boom of the late 1990s, Adrian warned that “surging valuations and consumption on the back of capital gains” could pose future financial risks.
The World Economic Outlook is published twice a year and provides the IMF’s latest analysis and projections for the global economy.
