IMF Boosts 2025 Global Growth Forecast to 30 Percent

Published on Jul 29, 2025.
IMF Boosts 2025 Global Growth Forecast to 30 Percent

The International Monetary Fund (IMF) has announced an increase in its global growth forecast for 2025 to 3.0 percent, attributing this optimistic revision to the unexpected resilience observed in major economies, notably China. This update highlights the ongoing adjustments in international relations, particularly in the context of trade dynamics.

In its recent World Economic Outlook update, the IMF confirmed a 0.2 percentage point increase from its previous forecast made in April, projecting a slight further increase in 2026 to 3.1 percent. This improvement underscores several positive trends influencing global economic activity.

The revision is underpinned by a series of favorable developments, including anticipatory economic activity aimed at mitigating the effects of anticipated higher trade tariffs, along with the relatively low average effective tariff rate in the United States. Additionally, enhanced financial conditions and fiscal expansion in key markets have contributed to this more promising outlook.

Although the United States experienced a contraction in real GDP during the first quarter, the IMF has adjusted its growth forecast upward to 1.9 percent for 2025, marking an increase of 0.1 percentage point. The euro area is also projected to see growth of 1.0 percent, aided by robust investment and net export performance.

China has registered the most significant upward revision, with growth expectations for 2025 now at 4.8 percent, representing a notable increase of 0.8 percentage point. The Chinese economy demonstrated remarkable performance, expanding at an annualized rate of 6.0 percent in the first quarter, benefiting from strong international demand despite a decline in exports to the United States.

As global economic indicators improve, headline inflation is expected to decline to 4.2 percent in 2025 and further to 3.6 percent in 2026. However, inflationary pressures show considerable disparity, with forecasts suggesting that inflation in the United States will remain above target levels, while other significant economies are likely to experience more muted price growth.

The IMF's chief economist, Pierre-Olivier Gourinchas, remarked on the better-than-expected resilience of the global economy but cautioned that persistent trade tensions continue to pose substantial challenges. He noted that while the effects of trade shocks might be less severe than initially feared, they still exert significant pressure on global economic conditions.

Given the current market volatility, the IMF has highlighted the urgent need to stabilize global trade policies. It calls for collective efforts to reduce uncertainty and to rebuild trust within the multilateral trading system to foster a more resilient economic environment.

Furthermore, the IMF report emphasized the necessity of maintaining central bank independence, which Gourinchas described as crucial for restoring price stability. He advocated that the capacity of central banks to make independent decisions free from political influences is vital for effective economic governance.

While the overall outlook has improved, the IMF cautioned that risks persist, particularly in the context of potential deepening of trade fragmentation and more enduring inflation. The organization's findings suggest that these factors could weigh on future economic performance, underscoring the need for vigilance in economic policy.

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