IMF October 2025 World Economic Outlook: Global economy in flux, prospects remain dim

Global growth projections in the International Monetary Funds’ latest World Economic Outlook, released on October 14, are revised upward relative to the April 2025 IMF economic outlook, but continue to mark a downward revision relative to the pre-policy-shift forecasts.

Global growth is projected to slow from 3.3 per cent in 2024 to 3.2 per cent in 2025 and 3.1 per cent in 2026, with advanced economies growing around 1.5 percent and emerging market and developing economies just above four per cent.

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.

The global economy is adjusting to a landscape reshaped by new policy measures, the IMF said.

“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 said.

Risks are tilted to the downside, the report said.

“Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability.

“Policymakers are urged to restore confidence through credible, transparent, and sustainable policies. Trade diplomacy should be paired with macroeconomic adjustment. Fiscal buffers should be rebuilt. Central bank independence should be preserved. Efforts on structural reforms should be redoubled, the IMF said.

(Photo: Bruno Sanchez Andrade)