Global growth is expected to remain stable, albeit lackluster in 2025, according to the January 2025 World Economic Outlook Update by the International Monetary Fund.

At 3.3%in both 2025 and 2026, the forecasts for growth are below the historical (2000–19) average of 3.7% and broadly unchanged from October.

It said the overall picture, however, hides divergent paths across economies and a precarious global growth profile.

Among advanced economies, growth forecast revisions go in different directions.

USA

In the United States of America, the Fund said underlying demand remains robust, reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions.

Again, growth is projected to be at 2.7% in 2025.

This is 0.5 percentage point higher than the October forecast, in part reflecting carryover from 2024 as well as robust labor markets and accelerating investment, among other signs of strength. Growth is expected to taper to potential in 2026.

Eurozone

In the euro area, growth is expected to pick up but at a more gradual pace than anticipated in October 2024, with geopolitical tensions continuing to weigh on sentiment.

“Weaker-than-expected momentum at the end of 2024, especially in manufacturing, and heightened political and policy uncertainty explain a downward revision of 0.2 percentage point to 1.0% in 2025. In 2026, growth is set to rise to 1.4%, helped by stronger domestic demand, as financial conditions loosen, confidence improves, and uncertainty recedes somewhat”, it said.

Other Advanced Economies

In other advanced economies, the IMF said two offsetting forces keep growth forecasts relatively stable. On the one hand, recovering real incomes are expected to support the cyclical recovery in consumption. On the other hand, trade headwinds—including the sharp uptick in trade policy uncertainty— are expected to keep investment subdued.

Emerging Markets/Developing Economies

In emerging market and developing economies, the Fund said growth performance in 2025 and 2026 is expected to broadly match that in 2024.

With respect to the projection in October 2024, growth in 2025 for China is marginally revised upward by 0.1 percentage point to 4.6%.

This revision reflects carryover from 2024 and the fiscal package announced in November largely offsetting the negative effect on investment from heightened trade policy uncertainty and property market drag.

In 2026, growth is projected mostly to remain stable at 4.5%, as the effects of trade policy uncertainty dissipate and the retirement age increase slows down the decline in the labour supply.   

Growth in sub-Saharan Africa is however expected to pick up in 2025, while it is forecast to slow down in emerging and developing Europe.