Overview
- The World Economic Outlook now projects global growth of 3.2% in 2025 (up from 3.0%) and 3.1% in 2026, with headline inflation seen at 4.2% next year and 3.7% in 2026.
- President Donald Trump threatened 100% tariffs on Chinese goods after Beijing expanded rare‑earth export controls, a flare‑up the IMF warns could significantly weaken output.
- IMF scenarios suggest steeper tariff escalation could cut global GDP by 0.3 percentage points in 2026 and by as much as 1.8 points by 2027 under broader adverse channels.
- Resilience to date reflects trade deals and exemptions, companies front‑loading imports and rerouting supply chains, a weaker dollar, fiscal support in Europe and China, and an AI‑driven investment boom.
- Country outlooks diverge: the U.S. is upgraded to 2.0% growth in 2025 and 2.1% in 2026, India rises to 6.6% for FY26 before easing to 6.2%, and China remains at 4.8% with property‑related financial risks flagged.