Tuba Ongun
17 January 2025•Update: 17 January 2025
ANKARA
The International Monetary Fund on Thursday projected the world economy to grow by 3.3% in both 2025 and 2026, according to its January World Economic Outlook.
The GDP growth for 2025 was revised slightly upward by 0.1 percentage point compared to its earlier estimate in October, while it remained stable for 2026.
Advanced economies are projected to expand by 1.9% this year and 1.8% next year, broadly unchanged from the previous projection.
Among advanced economies, the US economy is expected to grow by 2.7% in 2025, revised upward by 0.5 percentage points, reflecting carryover from 2024, as well as robust labor markets and accelerating investment, among other signs of strength.
The GDP growth for the US is projected to slow to 2.1% next year, a slight 0.1 percentage point upward revision.
"In the U.S., underlying demand remains robust, reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions," the IMF said.
The euro area's growth forecast, however, was revised down to 1%, from 1.2% for this year due to weaker-than-expected momentum at the end of last year, especially in manufacturing, and heightened political and policy uncertainty.
Growth is forecast to pick up pace in 2026 to 1.4%, thanks to stronger domestic demand, as financial conditions loosen, confidence improves, and uncertainty recedes somewhat.
Growth estimates for Germany were cut by 0.5 points and 0.3 points, respectively, to 0.3% and 1.1% in 2025 and 2026.
Emerging market and developing economies' growth estimates were broadly unchanged at 4.2% and 4.3%.
China's growth forecast for 2025 was revised upward by 0.1 percentage point to 4.6%.
"This revision reflects carryover from 2024 and the fiscal package announced in November, largely offsetting the negative effect on investment from heightened trade policy uncertainty and the property market," the IMF said.
In 2026, China's growth is expected to come in at 4.5%, up by 0.5 points, as the effects of trade policy uncertainty dissipate and the retirement age increase slows down the decline in the labor supply.
The GDP growth projection for India remains at 6.5% for both this year and next year.
The IMF marginally revised Türkiye's growth forecast for this year upward by 0.1 point to 2.6%, while leaving it unchanged at 3.2% for 2026.
It also projected that global headline inflation will drop to 4.2% in 2025 and further to 3.5% in 2026.
