IMF says outlook for global economy continues to be dim

The International Monetary Fund (IMF) said the outlook for the global economy continues to be dim, both in the short and the long term.

Global growth is projected to decelerate from 3.3% in 2024 to 3.2% in 2025 and to 3.1% in 2026.

The Washington-based lender released its latest World Economic Outlook report on Monday.

The growth forecast is little changed from the July update.

Despite some resilience and a steady first half, the IMF said the outlook remains fragile, and risks remain tilted to the downside.

The IMF said higher tariffs from renewed and unresolved trade tensions, coupled with supply chain disruptions, are part of what could lower global output.

The IMF has also raised some concerns about mounting fiscal pressures.

It said many governments, including some major advanced economies, have achieved only limited progress in rebuilding fiscal space.

Without immediate action, slower economic growth, higher real interest rates, elevated debt and new spending needs for defence, economic security, climate will further tightenthe fiscal vise.

As fiscal constraints become more binding, the IMF said many institutions face rising political pressure, including pressure on central banks across the world to ease monetary policy.

While downside risks dominate, the IMF says resolving policy uncertainty would provide a significant lift to the global economy and brighten the outlook.