IMF Projects 2.8% Global Growth in 2025, Inflation Decline, Warns Trade Tensions Hurt Economy

The International Monetary Fund (IMF) projects global economic growth of 2.8% in 2025 and 3.0% in 2026, reflecting steady expansion. Global headline inflation is expected to decline but at a slower pace, reaching 4.3% in 2025 and 3.6% in 2026. This inflation decrease is attributed to weakening demand and falling energy prices, although the rate of decline will vary across countries. The IMF also reported that global current account balances widened by 0.6 percentage points of GDP in 2024, marking the largest increase in a decade. The fund warned that an escalation of trade tensions and tariffs would have significant negative macroeconomic effects but would have little impact on global imbalances. These imbalances have increased, driven mainly by domestic policies in the United States and China, and tariffs are unlikely to address these underlying issues. Regional GDP growth projections for 2025 include Vietnam at 5.2%, Indonesia at 4.7%, Malaysia at 4.1%, Brunei at 2.5%, Singapore at 2.0%, Myanmar at 1.9%, and Thailand at 1.8%.