The International Monetary Fund says the global economy is losing steam as countries adapt to a new phase of trade tariffs, fiscal tightening, and policy adjustments.
In its latest World Economic Outlook released on Tuesday October 14, 2025 the Fund projects global growth to ease from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026 — despite a slight upward revision from its April forecast.
The IMF said the global landscape has been reshaped by new policy measures, with some of the harsher tariff impacts blunted by fresh trade deals and temporary boosts in early 2025. But those supports—such as firms front-loading exports ahead of new levies—are now fading.
Advanced economies are expected to expand by about 1.5%, while emerging markets and developing economies will grow just above 4%, reflecting resilient domestic demand in Asia and parts of Latin America. Inflation is forecast to keep easing, though it remains above target in the United States and subdued elsewhere.
Risks remain tilted to the downside, the IMF warned, citing ongoing policy uncertainty, protectionist pressures, and potential labor supply disruptions. Fiscal fragility and market corrections could further undermine stability.
The Fund urged policymakers to rebuild fiscal buffers, preserve central bank independence, and pursue structural reforms to restore business confidence and sustain medium-term growth momentum.
