IMF Revises Global Growth Forecasts Upward for 2025 and 2026

The International Monetary Fund (IMF) has revised its global growth projections upward for 2025 and 2026, signaling cautious optimism amid ongoing trade tensions.

In its July 29, 2025, World Economic Outlook, the IMF forecasts global growth rates of 3.0% for 2025 and 3.1% for 2026. These figures represent slight increases from previous estimates, attributed to factors such as businesses accelerating activities ahead of anticipated tariffs, reduced effective tariff rates, improved financial conditions, and fiscal expansion in key economies. Despite these positive signs, the projections remain approximately 0.2 percentage points below pre-April 2025 forecasts, underscoring the ongoing impact of trade disputes.

The IMF anticipates a decline in global inflation, projecting rates of 4.2% in 2025 and 3.6% in 2026. However, the organization cautions that trade tensions continue to weigh on the global economy. IMF Chief Economist Pierre-Olivier Gourinchas emphasized the importance of restoring confidence, predictability, and sustainability in global trade policies to mitigate ongoing uncertainties.

In Germany, the Ifo Institute has downgraded the country's economic growth forecasts, predicting marginal GDP growth of 0.2% in 2025 and 1.3% in 2026. Factors such as ongoing U.S. tariffs, weak global demand, elevated energy costs, and declining industrial output are significantly hindering Germany’s economic recovery. Timo Wollmershaeuser, head of forecasts at Ifo, warned that without effective pro-growth policies, Germany risks prolonged stagnation.

In the United States, New York Federal Reserve President John Williams suggested that gradual interest rate cuts may be appropriate if the U.S. economy continues to follow his forecast, which includes modest increases in unemployment and a decline in inflation in 2026. He highlighted concerns about the inflationary impact of President Trump's tariffs, estimating they could raise inflation by 1.0%-1.5% this year.

In Angola, the IMF revised the country's 2025 economic growth forecast down to 2.1% from 2.4%, citing reduced oil exports and weak oil production in the first half of the year. The IMF highlighted growing risks to Angola's debt repayment capacity and advised the country to limit borrowing and adopt a more flexible foreign exchange policy.

The IMF's updated projections suggest a cautiously optimistic outlook for the global economy. However, the persistent impact of trade tensions underscores the need for stable and predictable trade policies. Regions like Germany and Angola face specific challenges that could affect employment rates, public services, and overall economic stability. In the U.S., potential interest rate adjustments may influence consumer spending and investment decisions.

While the IMF's updated projections offer a glimmer of hope for global economic growth, the persistent impact of trade tensions underscores the necessity for coordinated international efforts to restore confidence and stability in global trade policies.