Global growth expected to remain steady —IMF
Global growth is anticipated to remain steady, although it may be underwhelming in 2025, as indicated in the January 2025 World Economic Outlook Update published by the International Monetary Fund.
At 3.3 per cent in both 2025 and 2026, the forecasts for growth are below the historical (2000–19) average of 3.7 per cent and broadly unchanged from October.
It noted that the overall
picture, however, hides divergent paths across economies and a precarious global growth profile.
Among advanced economies, growth forecast revisions go in different directions.
In the United States of America, the Fund said underlying demand remained robust, reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions.
Again, growth is projected to be at 2.7 per cent in 2025.
This is 0.5 percentage point higher than the October fore
cast, in part reflecting carryover from 2024 as well as robust labour markets and accelerating investment, among other signs of strength. Growth is expected to taper to potential in 2026.
In the euro area, growth is expected to pick up but at a more gradual pace than anticipated in October 2024, with geopolitical tensions continuing to weigh on sentiment.
“Weaker-than-expected momentum at the end of 2024, especially in manufacturing, and heightened political and policy uncertainty explain a downward
revision of 0.2 percentage point to 1.0 per cent in 2025. In 2026, growth is set to rise to 1.4 per cent, helped by stronger domestic demand, as financial conditions loosen, confidence improves, and uncertainty recedes somewhat,” it explained.
In other advanced economies, the IMF indicated that two offsetting forces keep growth forecasts relatively stable.
On the one hand, it said recovering real incomes were expected to support the cyclical recovery in consumption.
Again, trade headwinds, including the sharp uptick in trade policy uncertainty are expected to keep investment subdued.
In emerging market and developing economies, the Fund said growth performance in 2025 and 2026 was expected to broadly match that in 2024.
With respect to the projection in October 2024, growth in 2025 for China according to the IMF was marginally revised upward by 0.1 percentage point to 4.6 per cent.
BY TIMES REPORTER