In its World Economic Outlook Update (WEO Update) of January 2025, the International Monetary Fund (IMF) expects the global economy to grow by 3.3% in 2025. Its forecast of slightly higher growth than in 2024 reflects the expectation that inflation will continue to fall in a stabilizing global economy. However, the IMF sees divergences across individual countries.
According to the IMF, Europe is likely to continue to be characterized by subdued growth in 2025, hampered by weak production figures and exports on the back of sluggish demand. For the eurozone, the IMF therefore expects gross domestic product (GDP) to rise by just 1.0% in 2025, including GDP growth in Germany of 0.3%. For the UK, it expects GDP to increase by 1.6%.
For the USA, the IMF expects GDP growth of 2.7% in 2025, propped up by a business-friendly policy in the form of deregulation and the Federal Reserve’s less restrictive monetary and fiscal policy.
Japan’s economy is expected to return to higher growth rates in 2025 after the previous year was severely impacted by supply disruptions. The IMF expects its GDP to grow by 1.1% in 2025.
For India, the IMF forecasts a high GDP growth rate of 6.5%, as in 2024. Continued strong development is also expected in China as a result of fiscal policy support, with the IMF currently estimating GDP growth of 4.6%.
In other emerging and developing countries, the IMF expects weaker economic development in 2025 than in 2024. In Brazil, for example, it anticipates a 2.2% increase in GDP.
The IMF’s forecast is based on the assumption that energy prices will decline in 2025 and interest rates will continue to fall in major economies.
The IMF also points toward a number of opportunities and risks. Further disinflation could have a positive effect, as could a greater than expected fall in energy prices. Significant risks from the IMF’s perspective include the tense geopolitical situation and increasing protectionism, for instance in the form of tariffs, trade tensions and reduced market efficiency. This would bring with it a rise in the price of raw materials and disruptions to global supply chains. Furthermore, a renewed increase in inflation could prompt central banks to raise interest rates.
