IMF Raises Global Growth Forecast As Tariff Impact Less Severe Than Feared

(RTTNews) - The International Monetary Fund lifted the global growth forecast for this year and next as the impact of the trade tariffs has been less severe than initially expected but warned that the policy uncertainty remains high.

The global growth for this year is now forecast a 3.2 percent, and the pace is expected to slow to 3.1 percent next year, the IMF said in its latest World Economic Outlook released on Tuesday. The projection for this year was raised by 0.2 percentage points, while the outlook for next year was the same as in the July update.

The projections are cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, the report said.

The slowdown reflects headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced, the IMF added.

Inflation is expected to slow to 4.2 percent globally this year and to 3.7 percent in 2026, the WEO said. However, the U.S. is projected to experience above-target inflation with risks tilted to the upside.

Global trade volume is forecast to grow an average 2.9 percent in 2025-26, which is much slower than the 3.5 percent growth in 2024. Front-loading boosted growth this year, while persistent trade fragmentation is set to limit gains overall.

"Risks to the outlook remain tilted to the downside, as they were in previous WEO reports," the IMF said. "Prolonged policy uncertainty could dampen consumption and investment."

The growth forecast for the U.S. for this year and next were raised by a point each to 2.0 percent and 2.1 percent.

Eurozone's growth projection for this year was lifted by 0.2 percentage points each to 1.2 percent, while the forecast for next year was lowered by 0.1 point to 1.1 percent. China's growth forecasts for both years were retained at 4.8 percent and 4.2 percent.

India's growth projection for this fiscal year was raised by 0.2 points to 6.6 percent, while the forecast for next fiscal was trimmed by the same amount to 6.2 percent.