May 28, 2025 4:33 pm
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IMF Projects 4.2% Growth for Emerging Markets in 2025 Amid Global Uncertainties

The International Monetary Fund (IMF) has projected that emerging markets and developing economies will grow by 4.2% in 2025, with stronger momentum expected in Asia and Africa. However, global uncertainties and dim medium-term growth prospects remain key challenges.

Global growth is forecasted at 3.3% for both 2025 and 2026, which is below the historical average of 3.7% from 2000 to 2019. The 2025 forecast remains largely unchanged from the October 2024 World Economic Outlook, primarily due to an upward revision in the United States offsetting downward revisions in other major economies.

Global headline inflation is expected to decline to 4.2% in 2025 and further to 3.5% in 2026, converging back to target earlier in advanced economies than in emerging markets and developing economies.

The IMF highlights that medium-term risks are tilted to the downside, while the near-term outlook is characterized by divergent risks. Upside risks could boost growth in the United States in the short run, whereas other countries face downside risks amid elevated policy uncertainty. Policy disruptions to the ongoing disinflation process could impact fiscal sustainability and financial stability. The IMF emphasizes the need for a balanced policy focus on inflation and real activity, rebuilding buffers, and lifting medium-term growth prospects through structural reforms and stronger multilateral cooperation.

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