The International Monetary Fund downgraded its global growth forecast for 2025 to 3.1%, down from 3.4%, in its latest World Economic Outlook. The Fund cited escalating trade barriers between the US and China, elevated interest rates in advanced economies, persistent inflation in developing nations, and a faster-than-expected slowdown in Chinese consumer demand as primary factors. The eurozone is projected to grow at just 0.9%, while South Asia remains among the fastest-growing regions globally.
IMF Chief Economist Pierre-Olivier Gourinchas warned the global economy is entering a period of fragmentation, with trade blocs moving apart rather than integrating. India and Indonesia were highlighted as bright spots with projected growth of 6.8% and 5.1% respectively. The Fund called on advanced economies to begin coordinated rate cuts while urging developing nations to maintain fiscal discipline to avoid debt crises.
