IMF Predicts Steady Global Economic Growth Through 2026

The International Monetary Fund (IMF) released its January World Economic Outlook, forecasting global economic growth of 3.3% for both 2025 and 2026. The 2025 projection marks a slight upward revision of 0.1 percentage point compared to the IMF’s October estimate, while the 2026 outlook remains unchanged.

Advanced Economies: Steady Expansion

Advanced economies are expected to grow by 1.9% in 2025 and 1.8% in 2026, aligning closely with prior projections.

  • United States:
    The U.S. economy is forecast to expand by 2.7% in 2025, a 0.5-point upward revision driven by strong labor markets, robust investment, and favorable financial conditions. Growth is projected to slow slightly to 2.1% in 2026, reflecting sustained underlying demand.

    “In the U.S., underlying demand remains robust, reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions,” the IMF stated.

  • Euro Area:
    Growth in the eurozone is expected to slow to 1% in 2025, revised down from 1.2%, due to weaker manufacturing activity and heightened uncertainty. However, growth is anticipated to accelerate to 1.4% in 2026 as financial conditions ease and confidence improves.

    • Germany’s growth estimates were notably reduced, with 2025 now projected at 0.3% (down 0.5 points) and 2026 at 1.1% (down 0.3 points).

Emerging Markets and Developing Economies

Emerging market and developing economies are set to grow at 4.2% in 2025 and 4.3% in 2026, reflecting broad stability in projections.

  • China:
    China’s economy is forecast to grow by 4.6% in 2025, up 0.1 points, supported by fiscal stimulus and policy measures. Growth in 2026 is expected to hit 4.5%, a 0.5-point upward revision as trade policy uncertainty wanes and labor supply concerns stabilize.
  • India:
    India’s GDP is projected to grow consistently at 6.5% in both 2025 and 2026, maintaining its position as a global growth leader.
  • Türkiye:
    Türkiye’s growth projection for 2025 was slightly raised to 2.6%, a 0.1-point upward revision, with 2026 growth remaining steady at 3.2%.

Inflation Outlook

Global headline inflation is projected to decline to 4.2% in 2025 and further to 3.5% in 2026, reflecting easing price pressures and stabilizing supply chains.

While global economic growth remains resilient, regional disparities persist, with advanced economies experiencing moderated growth and emerging markets, particularly China and India, driving momentum. The IMF’s revisions highlight optimism for the U.S. and China while noting challenges in Europe and Türkiye.

 

 

 

 

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