IMF Forecasts Steady Global Growth in 2025

Global growth is expected to remain “stable yet underwhelming” in 2024 and 2025, at a steady 3.2 percent, according to the International Monetary Fund (IMF) October World Economic Outlook, published Tuesday.

As the following chart shows, India, China, Russia and the United States are forecast to see slower growth between 2024 and 2025. In Russia, this change is expected to be most pronounced, dropping 2.3 percentage points. Meanwhile, 2025 is forecast to be an improved year for growth in the United Kingdom, Japan and Germany.

There have been several notable revisions since the July 2024 World Economic Outlook. For example, the U.S. has had an upwards revision to a forecasted growth of 2.8 percent in 2024, from the previously estimated 2.6 percent. In 2025, growth is expected to slow to 2.2 percent in the U.S. as fiscal policy is gradually tightened and a cooling labor market slows consumption. This is still an improvement from the July forecast, which had estimated growth at 1.9 percent.

The upgrades to the U.S. forecast are offset by downgrades to other advanced economies. This is the case with the euro area, where 0.8 percent growth is now estimated for 2024 and 1.2 percent growth for 2025. This growth is slightly weaker than the July projections of 0.9 percent and 1.5 percent, respectively. According to a revised forecast, Germany’s economy is expected to stagnate in 2024, where previously it had been expected to see growth of 0.2 percent.

In India, GDP growth is expected to moderate from 8.2 percent in 2023 to 7 percent in 2024 and 6.5 percent in 2025. In the case of China, the slowdown is projected to be more gradual with the IMF citing how despite persistent weakness in the real estate sector and low consumer confidence, there have been "better-than-expected net exports".

In terms of risks ahead, the IMF warns of new potential spikes in commodity prices amid ongoing geopolitical conflicts as well as knock on effects if China sees a deeper- or longer-than-expected contraction in the property sector.