Washington dc: Global growth is projected to slow to 3.1 percent in 2026, following a decline from 3.2 percent this year and 3.3 percent in 2024, as reported by the International Monetary Fund (IMF).
According to BERNAMA News Agency, the IMF released its World Economic Outlook (WEO) for October 2025, indicating that advanced economies are expected to grow at approximately 1.5 percent, while emerging markets and developing economies are anticipated to grow just above four percent. The global economic landscape is in transition due to new policy measures, with some previously high tariffs being reduced through deals and resets. Despite these adjustments, the environment remains volatile, and temporary factors that boosted activity in early 2025, such as front-loading, are diminishing.
The IMF highlighted that global growth projections have been revised upward compared to the April 2025 WEO, but they still represent a downward revision from pre-policy-shift forecasts. The executive summary of the IMF’s report notes an improvement in the global growth outlook compared to the July WEO update. The slowdown reflects challenges from uncertainty and protectionism, although the impact of tariff shocks is smaller than initially anticipated.
By the end of 2025, global growth is expected to decrease to 2.6 percent from 3.6 percent in 2024. Advanced economies are forecast to grow around 1.5 percent during 2025-26, with the US predicted to slow to 2.0 percent. Emerging markets and developing economies are projected to moderate to just above 4.0 percent.
Inflation is anticipated to decline to 4.2 percent globally in 2025 and further to 3.7 percent in 2026, with significant variations across regions. The US may experience above-target inflation, with risks leaning towards the upside, while much of the rest of the world will see subdued inflation.
Global trade volume is expected to grow at an average rate of 2.9 percent in 2025-26, aided by front-loading in 2025, yet still slower than the 3.5 percent growth rate in 2024 due to ongoing trade fragmentation.
The IMF warned that risks to the economic outlook remain skewed to the downside, similar to previous WEO reports. Prolonged uncertainty, increased protectionism, and labor supply shocks could further impede growth. Additionally, fiscal vulnerabilities, potential financial market corrections, and institutional erosion pose threats to stability.
Policymakers are encouraged to restore confidence through credible, transparent, and sustainable policies. The IMF recommends that trade diplomacy be complemented by macroeconomic adjustments, fiscal buffers be rebuilt, central bank independence be maintained, and structural reform efforts be intensified.