IMF World Economic Outlook for 2025 gets slightly rosier, but risks still loom

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Overall, the economic outlook for global growth has marginally improved in recent months as details of trade dynamics become a little clearer, the International Monetary Fund said on Tuesday.

"After the United States introduced higher tariffs starting in February, subsequent deals and resets have tempered some extremes," the IMF said in the report. "But uncertainty about the stability and trajectory of the global economy remains acute."

The IMF now expects world output to rise 3.2% in 2025, up 0.2 percentage point from its July outlook and 0.4 pp from its April report. That still represents a slightly slower rate of growth than the 3.3% increase in output for 2024.

The projection for 2026 of 3.1% was unchanged from the July view.

Countries with the biggest increases to the 2025 outlooks are for Mexico (+0.8 pp to 1.0%), Nigeria (+0.5 pp to 3.9%), Saudi Arabia (+0.4 pp to 4.0%), Japan (+0.4 pp to 1.1%), and Spain (+0.4 pp to 2.9%). Meanwhile, the projections were cut for Canada (-0.4 pp to 1.2%) and Russia (-0.3 pp to 0.6%).

The strongest growth is expected in India, at 6.6%, up 0.2 pp from the July report. That's expected to moderate to 6.2% growth in 2026, a 0.2 pp downward revision from the previous report.

China's projected growth of 4.8% this year and 4.2% next year are both unchanged from the July projections.

Output from the U.S. is expected to grow 2.0% in 2025, up 0.1 pp from the prior report and slowing from 2.8% in 2024. In 2026, growth is expected to tick up to 2.1%, an upward revision of 0.1 pp from the July outlook.

Euro area growth is seen rising to 1.2%, a 0.2 pp improvement from the July report, and accelerating from 0.9% last year. Meanwhile, the outlook for next year is +1.1%, up 0.1 pp from the July assessment.

While the outlook is somewhat more optimistic than it was earlier in the year, there are still plenty of downside risks, the report said. [https://www.imf.org/en/Publications/WEO/Issues/2025/10/14/world-economic-outlook-october-2025] "Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability."

iShares MSCI World ETF (NYSEARCA:URTH [https://seekingalpha.com/symbol/URTH]) slips 0.4% in Tuesday morning trading.

By region, iShares MSCI India ETF (BATS:INDA [https://seekingalpha.com/symbol/INDA]) fell 0.4%, iShares MSCI Mexico ETF (NYSEARCA:EWW [https://seekingalpha.com/symbol/EWW]) -1.1%, iShares MSCI Japan ETF (NYSEARCA:EWJ [https://seekingalpha.com/symbol/EWJ]) +0.6%, iShares MSCI Saudi Arabia ETF (NYSEARCA:KSA [https://seekingalpha.com/symbol/KSA]) +0.1%, iShares MSCI Canada ETF (NYSEARCA:EWC [https://seekingalpha.com/symbol/EWC]) -0.5%, SPDR S&P 500 ETF (NYSEARCA:SPY [https://seekingalpha.com/symbol/SPY]) -0.5%, iShares MSCI Eurozone ETF (BATS:EZU [https://seekingalpha.com/symbol/EZU]) -0.2%.

DEAR READERS: We recognize that politics often intersects with the financial news of the day, so we invite you to click here to join the separate political discussion. [https://seekingalpha.com/article/4825358-politics-and-the-markets-101425]
[Table showing growth rate projections by country, and changes to outlook]
IMF World Economic Outlook by region (International Monetary Fund)

1) Difference based on rounded figures for the current, July 2025 WEO Update, and April 2025 WEO forecasts.

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