Global Economic Growth: Diverging Trajectories and Uncertainty

In 2025 and 2026, global economic growth rates are projected at 3.3 percent, which is below the historical average (2000–2019) of 3.7 percent. The forecast for 2025 has remained broadly unchanged compared to the projection presented in the October 2024 edition of the World Economic Outlook (WEO), mainly because an upward revision for the United States offsets downward revisions for other major economies. Global headline inflation is projected to decline to 4.2 percent in 2025 and 3.5 percent in 2026, with advanced economies returning to their inflation targets earlier than emerging market and developing economies.

Medium-term risks to the baseline forecast are tilted to the downside, while the short-term outlook is characterized by mixed risks. In the short term, upside risks may amplify already strong growth in the United States, whereas risks in other countries are shifted downward amid heightened uncertainty surrounding economic policy. Policy-induced disruptions to the ongoing disinflation process could halt the shift toward monetary policy easing, which would have implications for fiscal sustainability and financial stability. Managing these risks will require economic policies to focus on maintaining the balance between inflation and real activity, rebuilding buffers, and improving medium-term growth prospects through strengthened structural reforms, as well as reinforcing multilateral rules and cooperation.