WASHINGTON, D.C. — THE International Monetary Fund (IMF) is projecting that the global economy will expand by 3.2 percent in 2025 and 3.1 percent in 2026, despite persistent trade tensions, tariff shifts, and broader economic headwinds.
The projections were outlined during a press briefing on Tuesday (Oct. 14) at the 2025 International Monetary Fund–World Bank Annual Meetings in Washington, D.C., where officials discussed the global outlook amid evolving trade and fiscal dynamics.
According to the IMF, recent shifts in tariffs and trade policies—largely influenced by decisions in the United States—have prompted revisions to its economic forecasts over the past six months.
“The good news is that the growth downgrade is at the modest end of the range,” said Pierre-Olivier Gourinchas, the IMF’s Chief Economist and Director of Research. “With growth projected at 3.2% this year and 3.1% next year, inflation has increased modestly but is proving more persistent.”
Gourinchas explained that the impact of tariff shocks has been smaller than initially feared, as several trade exemptions and new agreements have helped to mitigate potential fallout.
Many countries facing trade frictions with the U.S. either refrained from imposing retaliatory tariffs or opted to keep trade channels open. Meanwhile, private-sector actors have remained agile—rerouting shipments and frontloading imports to cushion the effects of policy changes.
“Financial conditions remain loose, in part because of a weaker dollar,” Gourinchas noted. “In some countries, such as Germany and China, fiscal policy has turned expansionary, while in the U.S., AI- and tech-driven investment is booming.”
However, the IMF has warned that risks remain, with Gourinchas cautioning that ongoing tariff pressures are dampening already weak growth prospects, particularly in advanced economies. He pointed to the United States, where growth projections have been revised downward amid rising inflationary pressures and labour market challenges.
“The outlook remains fragile and very sensitive to news on the trade front, as I’m sure all of us have noted,” he said.
Closer to home in the Latin America and Caribbean region, the IMF projects upward growth revisions for 2025. The region is now expected to grow by 2.4 percent this year and 2.1 percent next year.
“The forecast for 2025 is revised upward by 0.4 percentage point relative to April, on account of lower tariff rates for most countries in the region and stronger-than-expected incoming data,” the IMF said in its review. “The revision is driven largely by Mexico, which is expected to grow at 1.0 percent in 2025—1.3 percentage points higher than forecast in the April 2025 WEO.”
For the Federation, the IMF is projecting a moderation in growth this year. According to IMP data, the economy is expected to expand by 1.7 percent, representing a 0.3 percentage point decline from 2024, before rebounding with a 0.5 percentage point increase in 2026.
Meanwhile, Guyana—buoyed by its rapidly expanding oil sector—remains the fastest-growing economy in the Caribbean, with projected growth of 10.3 percent for 2025, though this marks a significant slowdown from the previous year’s figures.
