The International Monetary Fund (IMF) has sharply lowered its global economic growth expectations for 2025, citing escalating trade disputes and heightened policy uncertainty as key factors driving a 'worrying phase of fragmentation' in the world economy. The revised projections signal challenges for businesses, governments, and households across Asia and beyond.
In its updated World Economic Outlook, the IMF now forecasts global GDP growth at 2.8% for 2025 and 3% for 2026 — a significant drop from the 3.3% projected earlier for both years. This marks the weakest medium-term outlook in decades, falling below the 3.7% average growth observed from 2000 to 2019.
Key Economic Shifts Ahead
Advanced economies face the steepest slowdown, with collective growth projected at just 1.4% in 2025
The U.S. economy is now expected to expand by 1.8% — nearly a full percentage point below January's forecast
Eurozone growth revised downward to 0.8%, reflecting persistent domestic and export challenges
Emerging markets are set to cool to 3.7% growth in 2025, raising questions about Asia's export-driven recovery
Analysts note that these projections could impact investment flows into Asian markets, particularly in tech and manufacturing sectors already navigating shifting trade alliances. The IMF emphasized that reducing trade barriers and strengthening multilateral cooperation remain critical to avoiding further economic erosion.
