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IMF Raises Global Growth Forecasts as Inflation Eases, But Risks Remain

IMF

In its July 2025 World Economic Outlook, the International Monetary Fund (IMF) has upgraded its global growth projections for the next two years. The report, titled “Global Economy: Weak Resilience in a Persistent Climate of Uncertainty”, revised the 2024 growth forecast to 3% (up from 2.8%) and 2025 to 3.1% (previously 3%). The outlook for 2026 was also increased slightly to 3.1%.

According to the IMF, the upward revisions were fueled by several factors, including:

  • Front-loaded demand due to tariff concerns,

  • Lower-than-expected average tariffs,

  • A weaker US dollar,

  • And fiscal expansions in major economies.

Global Inflation to Decline Gradually, But Uncertainty Persists

The IMF expects headline inflation to decline to 4.2% in 2025 and 3.6% by 2026. While inflation is projected to remain above target in the U.S., it is forecasted to trend more moderately in other major economies.

However, the report warned of downside risks to the global economy:

  • Geopolitical disruptions could pressure commodity prices via supply chain shocks.

  • Large fiscal deficits and rising risk aversion could lift long-term interest rates, tightening global financial conditions.

  • And persistent uncertainty may weigh on economic activity.

In a more optimistic scenario, a stable global trade framework and lower tariffs could fuel further growth.

Turkey’s Outlook Revised Up

The IMF upgraded its forecast for Turkey’s economy, projecting 3% growth in 2024 (up from 2.7%) and 3.3% in 2025 (previously 3.2%).

Global Revisions by Country

United States:

  • 2024: Upgraded from 1.9% to 2%

  • 2025: Revised from 1.8% to 1.9%

Euro Area:

  • 2024: Up from 0.8% to 1%

  • 2026: Remains at 1.2%

Germany:

  • 2024: From 0% to 0.1%

  • 2025: Holds at 0.9%

France:

  • 2024: 0.6%

  • 2025: 1% (unchanged)

Italy:

  • 2024: Raised from 0.4% to 0.5%

Spain:

  • 2024: 2.5%,

  • 2025: 1.8% (both unchanged)

United Kingdom:

  • 2024: Up from 1.1% to 1.2%

  • 2025: Steady at 1.4%

Japan:

  • 2024: From 0.6% to 0.7%

  • 2025: Downgraded from 0.6% to 0.5%

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