Economic Buzz: IMF modestly revises near-term global growth forecast but cautions overall environment remains volatile

In its latest World Economic Outlook released on Tuesday, the International Monetary Fund said that the global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets, but the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025?such as front-loading?are fading, the IMF noted.

As a result, global growth projections in the latest World Economic Outlook (WEO) are revised upward relative to the April 2025 WEO but continue to mark a downward revision relative to the pre-policy-shift forecasts, the Fund stated. Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies growing around 1.5 percent and emerging market and developing economies just above 4 percent. Inflation is projected to continue to decline globally, though with variation across countries: above target in the United States?with risks tilted to the upside?and subdued elsewhere. Risks are tilted to the downside. Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability, the monetary fund noted.

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