The International Monetary Fund on Tuesday projected global growth at 3.0 per cent in 2025 and 3.1 per cent in 2026, as significant policy shifts continue to unfold worldwide.
This projection is contained in the IMF’s latest World Economic Outlook (WEO) Update for July 2025, titled “Global Economy: Tenuous Resilience amid Persistent Uncertainty,” updated forecast for 2025 by 0.2 percentage points from April 2025 WEO and 0.1 percentage points higher for 2026.
The report projects sub-Saharan African growth to remain stable at 4 in 2025, as predicted in the April forecast, before increasing to 4.3 per cent in 2026. The Fund projected Nigeria’s growth to increase by 0.2% from its April forecast to 3.4 percent in 2025 and 3.2 per cent in 2026.
In other regions, the IMF projected that the Middle East and Central Asia will increase to 3.4 percent in 2025 and 3.5 percent in 2026, while Latin America and the Caribbean will experience slow growth at 2.2 percent in 2025 and will recover to 2.4 percent in 2026.
According to the IMF, this is a reflection of a stronger-than-expected front-loading due to anticipated higher tariffs and lower average effective U.S. tariff rates compared to those announced in April. It is also a reflection of an improvement in financial conditions, partly because of a weaker U.S. dollar and fiscal expansion in several major jurisdictions.
Global headline inflation is now projected to decrease to 4.2 percent in 2025 and 3.6 percent in 2026, following a path similar to the forecasts projected in April. However, the overall outlook hides significant differences among countries, with forecasts predicting that inflation will remain above target levels in the United States, while it is expected to be more subdued in other large economies. The report projected growth among advanced economies to be 1.5 percent in 2025 and 1.6 percent in 2026, like in the U.S., projected growth was expected to rise to 1.9 per cent in 2025 and 2.0 percent in 2026.
It said in the Euro area, growth was expected to increase to 1.0 percent in 2025 and 1.2 percent in 2026, while in other advanced economies, growth was projected to decrease to 1.6 per cent in 2025 and pick up to 2.1 percent in 2026. For emerging markets and developing economies, growth was expected to increase to 4.1 percent in 2025 and slightly drop to 4.0 percent in 2026.
The IMF warned that any loss of central bank independence could undermine efforts to keep inflation expectations in check, potentially triggering a wave of financial, monetary and macroeconomic instability. This is according to the IMF chief economist Pierre-Olivier Gourinchas. “Crucially, the ambiguous and volatile landscape also requires clear and consistent messaging from central banks and the protection of central bank independence, not only in legal terms, but also in practice,” he said.
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