Synopsis: The International Monetary Fund (IMF) has upgraded its global economic growth forecast for 2025 and 2026, citing relaxed US tariffs and a surge in imports. However, risks from trade tensions and stockpiling still loom over the recovery.
In a significant shift from its earlier outlook, the International Monetary Fund (IMF) has raised its global economic growth forecast, fueled by eased US tariffs and accelerated import activity. The global economy is now projected to grow by 3.0% in 2025 and 3.1% in 2026, slightly above its April 2024 prediction of 2.8% and 3.0%, respectively.
A key driver behind this revision is a sharp increase in US imports, as companies rushed to buy goods ahead of previously planned tariff hikes. Additionally, policy interventions by various governments aimed at stimulating domestic demand have contributed to this modest uplift in projections.
However, the IMF remains cautious. It emphasized that heightened uncertainty, potential future tariff escalations, and economic overstocking could pose threats. Businesses that stocked up to avoid duties may face issues like increased warehousing costs or goods turning obsolete — ultimately dampening future trade activity.
On the UK front, growth is expected to stay steady at 1.2% for 2025 and 1.4% in 2026, as per the May revisions. Notably, the UK stands out as the third-fastest growing economy among advanced nations, trailing only the US and Canada.
Despite the uptick, the latest IMF figures still fall short of its January 2024 projection of 3.3%, and are well below the pre-pandemic global average of 3.7%, indicating a recovery that remains fragile and uneven.
Disclaimer:This article is based on publicly available data and forecasts from the International Monetary Fund and news sources. Economic projections are subject to change based on policy shifts and unforeseen global developments.
