Pierre-Olivier Gourinchas, Director of the IMF Research Department, together with Petya Koeva Brooks (Deputy Director) and Deniz Igan (Division Chief), presented the latest World Economic Outlook.
The Fund forecasts global GDP growth of 3.2% in 2025 and 3.1% in 2026, noting that disinflation has slowed and price pressures remain stickier than previously expected. Gourinchas warned that the U.S. tariff shock continues to act as a negative supply factor, pushing inflation higher and weighing on growth. However, the overall impact of the trade war has been smaller than initially feared, thanks to limited retaliation and resilient supply chains.
Trade tensions remain the key downside risk. The IMF’s adverse scenario suggests that a renewed escalation could reduce global output by around 0.3 percentage points. Gourinchas also highlighted geopolitical fragmentation and the ongoing AI investment boom as defining global dynamics. A weaker dollar has eased financial conditions and reduced import-driven inflation pressures across many emerging markets.
Regional outlook
- Brooks pointed out that Egypt’s growth forecast was revised up to 4.3% in 2025 and 4.5% in 2026, alongside a sharp decline in inflation from its 40-month high.
- Igan noted that Nigeria’s growth outlook was raised to 3.9% in 2025 and 4.2% in 2026, supported by improved sentiment, stronger commodity output, and limited tariff spillovers.
- Sub-Saharan Africa was revised up to 4.1% in 2025 and 4.4% in 2026, driven by stabilization and reform momentum.
- The United Kingdom stands out among G7 economies with 1.3% growth in both 2025 and 2026, though inflation remains elevated (3.4% in 2025, trending toward 2.5%), justifying a cautious easing path by the Bank of England.
- For China, the IMF emphasized the increasing role of domestic demand in offsetting export weakness, while warning of lingering property-sector stress and rising external imbalances.
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