The estimates and projections are based on statistical information available

CHAPTER through April 14, 2025, but may not reflect the latest published data in all cases.

1 GLOBAL PROSPECTS AND POLICIES

Policy Uncertainty Tests Global Resilience

The global economy is at a critical juncture. Signs of stabilization were emerging through much
of 2024, after a prolonged and challenging period of unprecedented shocks. Inflation, down
from multidecade highs, followed a gradual though bumpy decline toward central bank targets
(Figure 1.1). Labor markets normalized, with unemployment and vacancy rates returning to
prepandemic levels (Figure 1.2). Growth hovered around 3 percent in the past few years, and
global output came close to potential (Figure 1.3).
Figure 1.1. Global Inflation Trends Figure 1.2. Labor Markets
(Percent, year over year) (Percent)

World US China 14 1. Unemployment Rates

Other AEs Other EMDEs 12 Latest

10 Lowest point
12 1. Headline Inflation
End of 2019
10 8

8 6

6 4

4 2

2 0

JPN

IND
AUS

CAN

KOR

GBR

USA

BRA

HUN

MEX

TUR
POL
EA
0
–2 2.0 2. Vacancy-to-Unemployment Ratios
Jan. Jan. Jan. Jan. Jan. Jan. Jan. Mar.
18 19 20 21 22 23 24 25 Latest
1.5 Peak
12 2. Core Inflation
End of 2019
10 1.0
8
6 0.5

4
0.0
2
AUS CAN GBR USA Europe
0
Sources: Haver Analytics; India Ministry of Statistics and Programme
–2 Implementation, Periodic Labour Force Survey; International Labour Organization;
Jan. Jan. Jan. Jan. Jan. Jan. Jan. Mar. Organisation for Economic Co-operation and Development; US Bureau of
18 19 20 21 22 23 24 25 Economic Analysis; US Bureau of Labor Statistics; and IMF staff calculations.
Note: In panel 1, India’s unemployment in urban areas is from Periodic Labour
Sources: Haver Analytics; and IMF staff calculations. Force Survey data. The “lowest point” is from the period spanning March 2019 to
Note: Panels 1 and 2 plot the median of a sample of 57 economies that accounts for the latest available data. In panel 2, “Europe” includes Austria, Belgium, Bulgaria,
78 percent of World Economic Outlook world GDP (in weighted purchasing-power- Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, The
parity terms) in 2024. Vertical axes are cut off at –2 percent and 12 percent. The
Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain,
bands depict the 25th to 75th percentiles of data across economies. “Core inflation”
and Sweden. The “peak” is from the period spanning January 2020 to the latest
is the percent change in the consumer price index for goods and services, excluding
available data. Data labels in the figure use International Organization for
food and energy (or the closest available measure). AEs = advanced economies;
Standardization (ISO) country codes. EA = euro area.
EMDEs = emerging market and developing economies.

However, major policy shifts are resetting the global trade system and giving rise to uncertainty
that is once again testing the resilience of the global economy. Since February, the United States
has announced multiple waves of tariffs against trading partners, some of which have invoked
countermeasures. Markets first took the announcements mostly in stride, until the United States’
near-universal application of tariffs on April 2, which triggered historic drops in major equity
indices and spikes in bond yields, followed by a partial recovery after the pause and additional
carve-outs announced on and after April 9. Despite significant equity market corrections in early
March and April, price-to-earnings ratios in the United States remain at elevated levels in
historical context, raising concerns about the potential for further disorderly corrections (April

International Monetary Fund | April 2025 1

Version date: April 20, 2025, 8:23 p.m.

 WORLD ECONOMIC OUTLOOK

2025 Global Financial Stability Report [GFSR]). Figure 1.3. Growth Performance and Forecasts
(Percent)
Uncertainty, especially that regarding trade policy,
has surged to unprecedented levels (Figure 1.4). The 12 1. Real GDP Growth
World AEs
degree of the surge varies across countries, 10
EMDEs US
8 Euro area China
depending on exposures to protectionist measures
6
through trade and financial linkages as well as
4
broader geopolitical relationships.
2

These developments come against an already- 0

2000–14 2015–23 2024–25
cooling economic momentum. Recent data on real
1 2. Global Output Gap
activity have been disappointing, with GDP growth
0
in the fourth quarter of 2024 trailing the forecasts in –1
the January 2025 World Economic Outlook (WEO) –2
Update. High-frequency indicators such as retail –3
sales and purchasing managers’ surveys point to –4
slowing growth. In the United States, consumer, –5
2017 18 19 20 21 22 23 24 25
business, and investor sentiment was optimistic at
the beginning of the year but has recently shifted to Source: IMF staff calculations.
Note: AEs = advanced economies; EMDEs = emerging market and developing
a notably more pessimistic stance as uncertainty has economies.

taken hold and new tariffs have been announced. In Figure 1.4. Overall Uncertainty, EPU, and TPU
labor markets, hiring has slowed in many countries, (Index)

and layoffs have risen. Meanwhile, progress on 70,000

WUI
700

disinflation has mostly stalled, and inflation has 60,000 TPU (right scale) 600
EPU (right scale)
edged upward in some cases, with an increasing 50,000 500
number of countries exceeding their inflation 40,000 400
targets. Services inflation, though still on a 30,000 300
downward trend, remains above levels prior to the
20,000 200
inflation surge, and core goods inflation has seen an
10,000 100
uptick since November 2024. Trade has held up, but
0 0
this is mostly because of an increase in Chinese Jan. Jan. Jan. Jan. Jan. Mar.
2015 17 19 21 23 25
exports and US imports at the end of 2024, with
consumers and businesses likely front-loading ahead Sources: Ahir, Bloom, and Furceri 2022; Caldara and others 2020; Davis 2016; and
IMF staff calculations.
Note: The uncertainty measures are news- and media-outlets-based indices that
of tariffs that were anticipated back then and now quantify media attention to global news related to overall uncertainty (WUI),
economic policy uncertainty (EPU), and trade policy uncertainty (TPU).
are in place.
In the backdrop, domestic imbalances and policy gaps give rise to unbalanced growth while
opening up potential fragilities. In some countries, such as China, growth in 2024 has been
mainly supported by external demand. On the contrary, in the United States, private
consumption—traditionally the major contributor to GDP growth—as a share of GDP has
reached its highest point during the 2020s, and the fiscal deficit remains historically large.
Within-country inequalities in households’ income gains signal another potential vulnerability. In

2 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

some cases, real GDP has recovered, but real Figure 1.5. Income Growth and Cost-of-Living Changes

GDP per capita has not (Figure 1.5, panel 1). In 4 1. Income Growth
(Percent)
others, median income has fallen behind, whereas 3 GDP growth GDP per capita growth

incomes at the top and bottom of the distribution 2

have recovered. Meanwhile, salient indicators of 1
the cost of living, such as house prices and rents,
0
have increased substantially (Figure 1.5, panel 2).
–1

15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
00–14
15–19
20–24
2000–14
Varying Momentum across Countries
The stable performance of the global economy USA ESP CAN GBR JPN ITA FRA DEU

in the past couple of years hides important 100 2. Cost-of-Living Changes 10

(Percent, relative to 2019:Q4)
differences across countries. These differences are 80 8
the result of diverse shocks, structural House price appreciation
Change in new mortgage rates (right scale)
60 6
characteristics, and policy actions. They manifest Change in consumer credit rates (right scale)

40 4
themselves in varying cyclical positions and
structural forces determining the outlook. 20 2

0 0
Cyclical Positions USA ESP CAN GBR JPN ITA FRA DEU

Most countries are not fully back to their Sources: Haver Analytics; Organisation for Economic Co-operation and
Development; and IMF staff calculations.
inflation targets yet, but output gaps are more Note: Data labels in the figure use International Organization for Standardization
(ISO) country codes.
dispersed (Figure 1.6, panel 1). In quite a few
Figure 1.6. Cyclical Positions
cases, fiscal policy remains accommodative even as (Percent)
monetary policy maintains a restrictive stance 4 1. Most Recent Inflation and Output Gap
(Figure 1.6, panel 2). 3
Inflation deviation
2 Output gap
The US economy was operating above its
1
potential in 2024, relying heavily on strong
0
domestic demand. Private consumption grew at an
–1
annual rate of 2.8 percent in 2024, in excess of its
–2
2.4 percent historical (2000–19) average. However, POL COL BRA MEX CHL USA IND GBR EA AUS CAN KOR

in 2025, signs of a potential reversal have emerged. 16 2. Monetary-Fiscal Policy Mix

Consumer spending declined by 0.6 percent in 12

RUS
Latest real policy rate

January and remained subdued in February after BRA

8 CAN
expanding by 0.6 percent in December 2024, with ZAF
MEX IDN
4 AUS
the decrease likely reflecting a normalization of GBR FRA USA IND
KOR ITA
0
private consumption toward more sustainable levels DEU JPN
CHN
and the negative impact of recurring policy shifts on –4
–4 –2 0 2 4 6
economic sentiment. This signals a deterioration of Change in fiscal balance, 2022–24

the cyclical position of the US economy. Sources: Haver Analytics; and IMF staff estimates.
Note: In panel 1, the inflation deviation is defined as the difference between
The euro area has been in a cyclical rebound, but 2025:Q1 inflation and the central bank’s inflation target. The output gap is the 2024
output gap. In panel 2, the fiscal balance refers to the general government structural
domestic demand has been subdued and, with the primary balance in percent of potential GDP. The structural primary balance is the
cyclically adjusted balance excluding net interest payments and corrected for a
exception of Germany, the contribution of broader range of noncyclical factors such as changes in asset and commodity
prices. Rolling 12-month ahead inflation expectations are used for the calculation of
the real policy rate. The sample includes G20 economies excluding Argentina,
consumption growth may have peaked in its largest Saudi Arabia, and Türkiye, owing to lack of data availability. Data labels in the figure
use International Organization for Standardization (ISO) country codes. EA = euro
economies. Weak consumer sentiment and elevated area.

International Monetary Fund | April 2025 3

 WORLD ECONOMIC OUTLOOK

uncertainty have raised precautionary saving while Figure 1.7. Consumer Confidence
(Index, OECD harmonized)
weighing down consumption growth (October
106
2024 Regional Economic Outlook: Europe).
104
Manufacturing activity has remained weak on the
102
back of persistently higher energy prices, while
services have been the main growth driver, 100

contributing to divergence among European 98

countries, particularly those relying more heavily 96 US

EA
China
ROW
on these sectors, notably Germany versus Spain. 94

For China, prolonged weakness in the real estate 92 Jan. Jan. Jan. Jan. Jan. Jan. Mar.
sector and its ramifications, including those for 2014 16 18 20 22 24 25

local government finances, have been key. When Sources: OECD; and IMF staff calculations.
Note: The rest of world (ROW) represents the average value for data across 22
the pandemic seized the Chinese economy, signs countries. EA = euro area; OECD = Organisation for Economic Co-operation and
Development.
of a downturn in the credit-fueled property market
were gathering. This homegrown vulnerability Figure 1.8. Real GDP versus Prepandemic Trend
has depressed domestic demand, even as (Index, 2019 = 100)

policymakers have searched for measures to 120 1. United States 140 2. China

tackle property market oversupply and bolster 2025 gap = +3.6

130
2025 gap = –5.3%
2020 gap = –3.5%
2020 gap = –4.1%
confidence. Indeed, consumer confidence in 110
120
China, after a decade of moving closely with
that in the rest of the world, plunged in early 100
110

2022 and has not recovered (Figure 1.7). Rising 100

trade tensions and new tariffs over the past 90 90

years have also disproportionately affected the 2019 21 23 25 2019 21 23 25

Chinese economy. The rebalancing of growth 120 3. Euro Area 120 4. Brazil

drivers from investment and net exports toward 2025 gap = –2.5%
2020 gap = –7.2%
2025 gap = –0.7%
2020 gap = –5.3%
consumption has paused amid continuing 110 110
deflationary pressures and high household
saving. Construction and real estate activity 100 100
remains subdued, whereas industry, trade, and
transport have been robust. 90 90
2019 21 23 25 2019 21 23 25
Structural Forces
120 5. AEs Excluding 140 6. EMDEs Excluding
The varying momentum also owes to the US and Euro Area China and Brazil
2025 gap = –1.1% 130 2025 gap = –6.2%
interaction of cyclical and structural factors. The 2020 gap = –5.5% 2020 gap = –7.1%
110
cross-country differences in growth rates would 120

be expected to narrow as the cyclical forces 110

100
dissipate but may not disappear. 100

Compared with the GDP level implied by the 90 90

2019 21 23 25
prepandemic trend, most economies have made 2019 21 23 25

up for some of the damage done by the Source: IMF staff calculations.
Note: Solid-line data are from April 2025 World Economic Outlook (WEO). Dashed
pandemic (Figure 1.8). The United States has lines denote prepandemic trend based on January 2020 WEO Update. AEs =
advanced economies; EMDEs = emerging market and developing economies.

4 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

been an outlier, but generally, scarring has been less pronounced than initially thought, speaking
to the surprising resilience of the global economy (April 2024 WEO). Still, there are several cases
in which output is still falling behind the prepandemic trend.
A big part of the story behind the scarring Figure 1.9. Shifts in Energy Imports and Exports
is the energy shock. European economies, 60 1. Energy Dependency of European Countries
(Terawatt-hours, unless noted otherwise)
including major manufacturing hubs such as
40
Germany and Italy, were particularly
exposed to the disruption of natural gas 20

markets following Russia’s invasion of 0

Average electricity generation dependent on Russian gas, 2016–21
Ukraine (Figure 1.9, panel 1). As oil and Total energy supply dependent on natural gas, 2023 (percent)
–20
natural gas prices soared, countries shifted Renewable electricity generation growth, 2021–23
Electricity generation dependent on natural gas, 2023 (percent)
their energy sources and increased efficiency –40
DEU FRA NLD POL AUT FIN HUN GRC ITA Other
in their energy consumption. There are EU

limits to such strategies, however, because 20 2. Oil 1.0

(Millions of barrels per day; Share in consumption,
substitution of energy sources may be right scale) Exports
difficult, and many countries remain 10 Imports 0.5
Net exports share (right scale)
dependent on oil and natural gas imports
0 0.0
for their energy use (Figure 1.9, panels 2 and
3). Crucially, this shock had a twofold effect –10 –0.5
on commodity importers as the dollar
strengthened, with the US terms of trade –20
2014 19 23 14 19 23 14 19 22
–1.0

improving amid heightened uncertainty United States Europe China

(External Stability Report 2024). Because
commodity prices are expressed in dollars, 300 3. Natural Gas 0.6
(Billions of cubic meters; Share in consumption,
the stagflationary pressures on commodity 200 right scale) Exports 0.4
Imports
importers have become stronger. Similar 100
Net exports share (right scale)
0.2

dynamics apply to global food markets, with 0 0.0

–100 –0.2
the effects felt especially in low-income
–200 –0.4
countries. By contrast, the United States not
–300 –0.6
only was already less dependent on energy
–400 –0.8
imports but had also transitioned from 2014 19 23 14 19 23 14 19 22
being a net energy importer to a net energy United States Europe China

exporter. This shift has partly insulated the Sources: Energy Institute; International Energy Agency; and IMF staff calculations.
US economy from the commodity market Note: In panel 1, data labels use International Organization for Standardization
(ISO) country codes. “Other EU” refers to the remaining European Union (EU)
disruptions caused by the war. countries. In panel 2, oil trade includes both crude oil and oil products. In panels 2
and 3, “Europe” includes European members of the Organisation for Economic Co-
Labor productivity growth has declined in operation and Development plus Albania, Bosnia and Herzegovina, Bulgaria,
Croatia, Cyprus, Georgia, Gibraltar, Latvia, Lithuania, Malta, Montenegro, North
recent years in nearly every country besides Macedonia, Romania, and Serbia. Intra-European trade is excluded from “Europe”
values.
the United States (Figure 1.10, panel 1). The
relative strength in US labor productivity growth in part reflects stronger investment (Figure
1.10, panel 2). Capital shallowing because of chronic investment weakness can explain roughly
half of the productivity growth slowdown in advanced economies since 2010 and about a third
of that in emerging market and developing economies (Fernald and Li 2023; Igan and others

International Monetary Fund | April 2025 5

 WORLD ECONOMIC OUTLOOK

2024). Greater labor market flexibility may Figure 1.10. Labor Productivity and Capital Investment
have also played a role in how productivity 3 1. Labor Productivity Growth
(Percent)
growth has evolved since the pandemic. The
rate of job-to-job transitions explains a large 2
share of productivity growth in the United
States since 2020 (Dao and Platzer 2024). By 1
contrast, countries where furlough programs
were introduced have typically experienced
0
slower productivity growth. Although these 2001–10 11–19 20–23 01–10 11–19 20–23 01–10 11–19 20–23

programs are designed to preserve skill United States Other AEs EMDEs excluding China

matches and prevent skill-diluting 180 2. Private Gross Fixed Capital Formation
unemployment spells, thereby enhancing (Index, 2014 = 100)
160
United States
medium-term productivity, their effectiveness China
140
may be compromised by additional factors. Other AEs
Other EMDEs
The war-related energy shock, coupled with the 120

persistent nature of these disruptions, could 100

adversely affect productivity by obstructing the
80
necessary reallocation of resources across 2012 14 16 18 20 22 24

different sectors of the economy. More Source: IMF staff calculations.

generally, traditionally higher job market churn Note: In panel 1, labor productivity is calculated on a per-worker basis. In panel 2,
dashed lines denote the 2014–19 trend. AEs = advanced economies; EMDEs =
in the United States relative to that in Europe emerging market and developing economies.

has likely allowed workers to make job-to-job

Figure 1.11. Industrial Production Trends
transitions more easily. (Index, Jan. 2019 = 100)

The productivity growth discrepancies have a 140 United States

China
counterpart in how manufacturing activity 130 Japan
continues to shift away from advanced 120
EU4
Other EU
economies to emerging market economies. 110
ASEAN-5

Industrial production plunged in all countries at 100

the onset of the pandemic (Figure 1.11). The 90
recovery paths, however, have been decisively 80
different. Production has soared in China and 70
has also expanded in smaller EU economies and 60
Jan. Jan. Jan. Jan. Jan. Jan. Dec.
the ASEAN-5 (Indonesia, Malaysia, the 2019 20 21 22 23 24 24
Philippines, Singapore, Thailand), whereas it has
Sources: United Nations Industrial Development Organization; and IMF staff
struggled to get back to prepandemic levels in calculations.
Note: Figure data are calculated as three-month moving averages. “EU4” refers to
Japan and the largest EU countries. Industrial France, Germany, Italy, and Spain. “Other EU” refers to all other European Union
(EU) countries. ASEAN-5 = Indonesia, Malaysia, the Philippines, Singapore, and
production in the United States has made it back Thailand.
up and performed better there than in advanced economy peers.
Adding to the manufacturing headwinds in some economies are demographic headwinds.
Countries around the world are progressively crossing their demographic turning points—when
the share of the working-age population starts declining—with direct implications for labor
supply and productivity (see Chapter 2). Germany, Italy, and Japan are ahead of others with

6 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

declining shares of working-age population, as is China, while the United States is not too far
behind those countries, but strong flows of immigrants with quick adaptation to labor markets
have shielded its economy more than other economies.
Diminished Policy Space
Crucially, much of the available policy space has already been exhausted in many countries
(April 2020, April 2021, and October 2022 WEO reports), limiting how much support
policymakers can give economies in case of new negative shocks or a pronounced downturn.
Many countries passed large fiscal support packages, first during the pandemic and then as
energy and food prices spiked at the onset of
Figure 1.12. Fiscal Policy Space
Russia’s invasion of Ukraine. Fiscal policy
was expected to pivot somewhat toward 4 1. Fiscal Adjustment Need IQR of PB adjustment
(Percent) Current adjustment (DSPB based)
consolidation; however, on account of recent 2
geopolitical developments, some regions are
now poised to pursue fiscal expansion. After 0

the pandemic, the decisive and forceful

–2
monetary policy response brought inflation
down to near central bank targets at relatively –4
little cost to economic activity (see Chapter 2 ITA AUS DEU USA GBR FRA MEX ZAF BRA
G20 advanced G20 emerging
of the October 2024 WEO). The hard-earned
credibility of central banks played an 20 2. General Government Interest Payments 8
(Percent of general government revenues)
important role by limiting de-anchoring of
15 EMMIEs LIDCs AEs (right scale) 6
inflation expectations. But the legacies, in the
form of high public debt levels and increased 10 4

scrutiny of central bank decisions, remain.

5 2
High Public Debt amid Elevated
0 0
Interest Rates 2015 16 17 18 19 20 21 22 23 24

Fiscal support during the pandemic and at 3 3. Real 10-Year Government Bond Yields
(Percent per year)
the onset of the war in Ukraine in response 2
United States United Kingdom
to spiking energy and food prices supported 1 Japan Euro area
the recovery. But fiscal measures sharply 0
increased debt-to-GDP ratios. Despite some –1
reductions that have occurred and additional
–2
cuts being planned, budget deficits remain
–3
large and cast a shadow on the outlook. 2015:Q1 17:Q1 19:Q1 21:Q1 23:Q1 25:Q1

Fiscal space is now much tighter than a Sources: Consensus Economics; Organisation for Economic Co-operation and
decade ago, and the fiscal adjustment Development; and IMF staff calculations.
Note: Panel 1 shows current three-year adjustment need versus historical
required to stabilize debt ratios is at a historic adjustment. IQR refers to the interquartile range of three-year primary balance (PB)
adjustments over the period 2000–19, calculated as the change between years t +3
high (Figure 1.12, panel 1). and t using a rolling window. Current adjustment need is based on the difference
between the 2028 debt-stabilizing primary balance (DSPB) and the 2025 primary
balance excluding other flows. In panel 2, lines show medians, and shaded area
At the same time, debt service as a fraction denotes the IQR over all countries. Panel 3 shows real rates calculated using long-
of fiscal revenue is rising (Figure 1.12, panel term inflation expectations from Consensus Forecasts. Data labels in the figure use
International Organization for Standardization (ISO) country codes. AEs = advanced
2). The heterogeneous increase reflects cross- economies; EMMIEs = emerging market and middle-income economies; G20 =
Group of Twenty; LIDCs = low-income developing countries.

International Monetary Fund | April 2025 7

 WORLD ECONOMIC OUTLOOK

country divergence in fiscal policy stances, growth and inflation patterns, and debt maturity
structures, with relatively larger reliance on short-term debt in some cases. Although servicing
costs remain below pandemic levels in countries where debt was incurred under favorable
conditions during COVID-19, effective rates are likely to surpass prepandemic levels as debt
rolls over, notably those for low-income countries and some emerging market and developing
economies.
After more than a decade of very low interest rates in advanced economies, real long-term
government bond yields have been on the rise (Figure 1.12, panel 3), surging significantly in
recent months. Higher long-term rates, initially driven by monetary policy tightening, are
persisting even as the monetary policy cycle has turned, owing to a global rise in term premiums.
In the United States, a combination of increased issuances, higher expected inflation, and risk
premiums compounded the rise in term premiums until mid-January, when long-term interest
rates moderated. The recent tariff announcements pushed them back up again.
Inflation Expectations on Edge after Inflation Scare
Inflation expectations now exceed central bank Figure 1.13. Inflation Deviation from Target
targets in most advanced economies as well as 4 1. Cross-Country Inflation Expectations
(Percentage point deviation from target, next 12 months)
emerging market and developing economies, 3
2017–21 average 2024 average
whereas their group averages between 2017 and 2
2021 were at or below target (Figure 1.13). 1
Yields remain sensitive to inflation surprises and 0
diminishing fiscal space (April 2025 GFSR). In –1
economies already operating at or close to –2
potential and facing potential inflationary AEs EMDEs

pressures, including those from new trade 2.5 2. Consensus Inflation Expectations
(Deviation from central bank target)
policies and exchange rate movements, there is 2.0
Five year One year
1.5
less leeway for central banks to “look through”
1.0
new negative supply shocks.
0.5

Global Imbalances Arising from 0.0

Domestic Imbalances –0.5

–1.0
Rising geopolitical tensions and widening JPN ZAF KOR FRA AUS USA DEU ITA EA CAN GBR IND BRA MEX

domestic imbalances—in particular, weak

Sources: Central bank websites; Consensus Economics; Haver Analytics; and
demand in China and strong demand in the IMF staff calculations.
Note: In panel 1, sample includes 30 advanced economies (AEs) and 31 emerging
United States—have renewed concerns about market and developing economies (EMDEs). The horizontal lines in the middle of
the boxes show the medians, and the upper (lower) limits of the boxes show the
global imbalances (Gourinchas and others 2024). third (first) quartiles. The whiskers show the maximum and minimum within a
boundary of 1.5 times the interquartile range from the upper and lower quartiles,
Other nonmarket policies and state interventions respectively. In panel 2, “one year“ is based on March 2025 data. Data labels use
International Organization for Standardization (ISO) country codes. EA = euro
could also contribute to external imbalances. area.

The volume of international trade in percent of world GDP has been broadly stable, but
structural changes have been taking place nonetheless. Overall, increasingly more trade has been
occurring within countries historically aligned with each other rather than between them
(October 2024 WEO). Moreover, since 2016–17, China and the United States have diversified
their bases of trading partners, decoupling from each other in terms of export and import

8 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

linkages (Figure 1.14). In some cases, this Figure 1.14. Changes in Trade Composition
diversification has happened at a (Percentage points, change in trade shares, 2023–24 minus 2016–17)
microeconomic level along the supply EU US China Emerging Asia Mexico LAC Russia
chain through trade rerouting and 5 1. Change in Export Shares by Destination 12.2
production reallocation, such as that 4
3
~
which has taken place among emerging
2
markets in Asia, with an increasing share 1
of import origination for the United 0
–1
States and as import as well as export –2
counterparts for China. In addition, a –3
–4 ~
distinct macroeconomic dimension of –17.5
–5
trade reallocation has emerged. For EU US Canada Mexico China Vietnam

example, shifting demand patterns have 5 2. Change in Import Shares by Origin 9.8
led Europe to import more from China in 4
~
3
general, and from the United States in the 2
energy sector. At the same time, Europe 1
0
is exporting more to the United States in
–1
other sectors. As a result, Europe’s trade –2
exposure to both China and the United –3
~
–4
States has increased. –5
–7.7
EU US Canada Mexico China Vietnam
Global current account balances—the
Sources: IMF, Direction of Trade Statistics; and IMF staff calculations.
sums of absolute surpluses and deficits— Note: “Emerging Asia” excludes China and “LAC” excludes Mexico. EMDE =
have declined from their 2022 peaks. But emerging market and developing economy; EU = European Union; LAC = Latin
America and the Caribbean.
they remain larger than the averages
observed just before the pandemic (see “The Outlook: A Range of Possibilities” section). The
deficit in the United States is larger than it was in the late 2010s.
Imbalances are also becoming visible in net international investment positions. The net asset
position of US residents—US holdings of foreign securities minus foreign holdings of US
securities—resumed its downward trend in 2023 after increasing briefly in 2022 (April 2025
GFSR). The decline is attributable not only to US equity prices increasing more than foreign
equity prices but also to rising foreign purchases of US bonds during this period. Recent years
have also seen a concentration of foreign direct investment (FDI) flows toward the United
States (Figure 1.15, panel 1).
The dollar appreciated sharply in the run-up to the US elections in November 2024, with
markets expecting higher US growth and tighter monetary policy. However, since February
2025, the dollar has lost all the gains it achieved in the last quarter of 2024 (Figure 1.15, panel 2),
on the back of weaker US growth prospects and uncertainty. Initial depreciation pressures were
particularly pronounced for the currencies of emerging market and developing economies, but
they have dissipated following the softening in 2025 (Figure 1.15, panel 3). Since April 2, global
risk appetite has declined substantially, with the risk-off environment inducing an offset to the
appreciation of emerging market currencies.

International Monetary Fund | April 2025 9

 WORLD ECONOMIC OUTLOOK

The Outlook: A Range of Possibilities

The swift escalation of trade tensions has generated extremely high levels of policy ambiguity,
making it more difficult than usual to establish a central global growth outlook. Therefore, this
WEO presents a range of global growth projections. First is a “reference forecast” based on
measures announced as of April 4. This is what is presented in the tables of this report and the
WEO database. Second, a pre–April 2 forecast (with a cutoff date of late March) incorporates all
prior policy announcements and economic developments since the October 2024 WEO. Third,
a post–April 9 model-based forecast is used to quantify the implications of the announced pause and
associated additional exemptions, as well Figure 1.15. Capital Flows and Exchange Rates
as the escalating tariff rates between China
250 1. Foreign Direct Investment Trends across Countries
and the United States. (Capital expenditure, billions of US dollars)
200 United States United Kingdom
Global Assumptions China Japan
150 India EU
The reference forecast is predicated on
several projections for global commodity 100

prices, interest rates, and fiscal policies 50

(Figure 1.16). Acknowledging the high
0
level of prevailing uncertainty, Box 1.1 2013 15 17 19 21 23 24
presents scenarios involving additional
120 2. US Dollar Nominal Effective Exchange Rate
trade, fiscal, and structural policies as well (Index, 2020 = 100)
US election
as other plausible shocks. 115

• Commodity price projections: Prices of fuel 110

commodities are projected to decrease
in 2025 by 7.9 percent, with a 15.5 105

percent decline in oil prices and a 15.8

100
percent drop in coal prices offset by a Jan. Apr. Jul. Oct. Jan. Apr.
22.8 percent increase in natural gas 2024 24 24 24 25 25

prices, the latter driven up by colder- 15 3. Exchange Rate Depreciation versus US Dollar
(Percent appreciation)
than-expected weather and the halt of 10 Oct. 16, 2024–Jan. 16, 2025
Jan. 17–Apr. 8, 2025
Russian gas flow to Europe through 5 Cumulative
Ukraine since January 1. Nonfuel
0
commodity prices are projected to
–5
increase by 4.4 percent in 2025.
–10
Projected food and beverage prices
have been revised upward compared –15
CZE

IND

IDN
TUR
PHL

DZA

ISR
HKG

CHL
ETH
MEX

ZAF
CHE
NGA

ROU
DNK
POL

PER

MAC
HUN
GBR

SGP

CHN
MYS

KOR
COL
CAN

EGY
BRA

AUS
EA

with those in the January 2025 WEO

Update. Sources: Bank for International Settlements; Haver Analytics; Orbis Crossborder
Investment; and IMF staff calculations.
• Monetary policy projections: The Federal Note: Panel 1 shows capital expenditure on new and expansion inward foreign
direct investment projects that have been announced, completed, or postponed by
Reserve and the European Central destination country. Intra-EU investment is excluded for EU values. In panel 2,
exchange rates are based on end-of-month data, with April data up to April 8, 2025.
Bank are expected to continue to An increase indicates appreciation. In panel 3, percentage appreciation is computed
as the difference in log exchange rates. Data labels in the figure use International
reduce interest rates in the coming Organization for Standardization (ISO) country codes. EA = euro area; EU =
European Union.
quarters, albeit at different paces from

10 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

one another. In the United States, the federal funds rate is projected to be down to 4 percent
at the end of 2025 and reach its long-term equilibrium of 2.9 percent at the end of 2028. In
the euro area, 100 basis points in cuts are expected in 2025 (with three cuts having already
occurred this year), representing two more 25 basis point cuts than in the assumptions
underlying the October 2024 WEO, bringing the policy rate to 2 percent by the middle of the
year. In Japan, policy rates are expected to be lifted at a similar pace as assumed in October
2024, gradually rising over the medium term toward a neutral setting of about 1.5 percent,
consistent with keeping inflation and inflation expectations anchored at the Bank of Japan’s 2
percent target.
Figure 1.16. Global Assumptions
• Fiscal policy projections: Governments in
120 1. Energy and Food Prices
advanced economies on average are (Index, 2022:Q4 = 100)
110
expected to tighten fiscal policy in 2025–
100
26 and, to a lesser extent, in 2027. The 90
general government structural-fiscal- 80
Energy Food and beverage

balance-to-GDP ratio is expected to 70

improve by 1 percentage point in the 60
United States in 2025. Yet it is worth 50
2022: 23: 24: 25: 26:
noting that under current policies, US Q4 Q4 Q4 Q4 Q4
public debt fails to stabilize, rising from 7 2. Monetary Policy Projections
121 percent of GDP in 2024 to 130 6
(Percent, quarterly average) United States
Euro area
percent of GDP in 2030. These 5 Japan
4
projections do not incorporate measures
3
that remain under discussion at the time 2
of publication, notably, the net 1
expansionary US budget resolution 0
–1
(currently, most provisions under the 2022: 23: 24: 25: 26: 27:
Tax Cuts and Jobs Act are assumed to Q4 Q4 Q4 Q4 Q4 Q4

expire at the end of 2025). In the euro 1.0 3. Fiscal Policy Projections
(Percentage points, change in fiscal balance)
area, under the reference forecast, the
primary deficit in Germany is expected 0.5
to widen by about 1 percent of GDP by
2030 relative to 2024 and by about 4 0.0
percent of GDP relative to the January
WEO forecast for 2030, with the
–0.5
increase driven primarily by higher 2024 25 26 27 24 25 26 27
Advanced economies Emerging market and
defense spending and public investment, developing economies

and this is assumed to generate spillovers Source: IMF staff calculations.

to France, Italy, and Spain. The euro area Note: In panels 1 and 2, solid lines denote projections from the April 2025 World
Economic Outlook (WEO) and dashed lines those from the October 2024 WEO. In
debt-to-GDP ratio is expected to panel 3, the fiscal balance used is the general government structural primary
balance in percent of potential GDP. The structural primary balance is the
increase from its current 88 percent to 93 cyclically adjusted primary balance excluding net interest payments and corrected
for a broader range of noncyclical factors such as changes in asset and
percent in 2030, although there is commodity prices.

significant uncertainty surrounding the assessment of the economic impact of the additional
fiscal spending. In emerging market and developing economies, primary fiscal deficits are

International Monetary Fund | April 2025 11

 WORLD ECONOMIC OUTLOOK

projected to widen in 2025 by 0.3 percentage point on average, followed by fiscal tightening
starting in 2026. In China, the structural-fiscal-balance-to-GDP ratio is expected to
deteriorate by 1.2 percentage points in 2025. Public debt in emerging market and developing
economies continues to rise from its current level of 70 percent of GDP, reaching a projected
83 percent in 2030.
• Trade policy assumptions:
o Tariff announcements between February 1 and April 4, with specific details on their
implementation, are included in the reference forecast. On February 1, executive orders
signed by US President Donald J. Trump imposed tariffs on Canada, China, and
Mexico. An additional tariff of 10 percent on all imports from China came into effect
on February 4, and another 10 percent was imposed on March 4. China responded with
tariffs of 10 to 15 percent on imports of select US agricultural products, energy
commodities, and farm equipment, which took effect on February 10, and on imports
of agricultural products, which took effect on March 10. Tariffs of 25 percent on all
nonenergy goods imports from Canada (for energy, 10 percent) and of 25 percent on all
imports from Mexico took effect on March 4, with the exemption of goods compliant
with the United States–Mexico–Canada Agreement (USMCA). Canada announced 25
percent countertariffs on roughly 40 percent of Canadian imports of goods from the
United States. Mexico indicated the intention to respond without specifying the
measures to be employed, hence the reference forecast includes no additional tariff
imposed on Mexican imports from the United States. The United States also expanded
tariffs on steel and aluminum, effective March 12, removing all exemptions to the 25
percent tariff on steel imports and increasing the tariff rate on aluminum from 10 to 25
percent. On March 26, the United States announced a 25 percent tariff on all
automobiles and auto parts, excluding US content in auto and auto parts exports. This
tariff came into effect on April 3 for autos, while implementation for auto parts was
postponed to May 3. The US Fair and Reciprocal Plan was introduced on April 2,
imposing a 10 percent minimum tariff on all countries other than Canada and Mexico
and country-specific rates as high as 50 percent for roughly 60 countries. The universal
10 percent minimum tariff took effect on April 5, and the other tariffs were set to take
effect on April 9. Exemptions applied to categories of goods deemed critical, such as
pharmaceuticals, semiconductors, energy, and certain minerals. Countermeasures from
Canada, announced on April 3, consisted of 25 percent tariffs on non-USMCA-
compliant fully assembled vehicles imported from the United States. On April 4,
China announced 34 percent tariffs, matching the increase in US duties on imports
from China, to take effect on April 10.
o Under the reference forecast, trade policy uncertainty is assumed to remain elevated
through 2025 and 2026. The perceived unpredictability of the current trade landscape is
evident from the significant spike in the daily trade policy indicator (Caldara and others
2020), which surged more than four standard deviations in just three days after April 2,
despite the disclosure of the details of the expected tariffs.

12 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

Growth Forecast
Global Growth: Reference Forecast and Alternatives
In the near term, under the reference forecast, global growth is projected to fall from an
estimated 3.3 percent in 2024 to 2.8 percent in 2025, before recovering to 3 percent in 2026.
This is lower than the projections in the January 2025 WEO Update, by 0.5 percentage point for
2025 and 0.3 percentage point for 2026, with downward revisions for nearly all countries (Tables
1.1 and 1.2). The downgrades are broad-based across countries and reflect in large part the direct
effects of the new trade measures and their indirect effects through trade linkage spillovers,
heightened uncertainty, and deteriorating sentiment. As indicated in the illustrative model
simulations presented in Box 1.2, the growth impact of tariffs in the short term varies across
countries, depending on trade relationships, industry compositions, policy responses, and
opportunities for trade diversification. Fiscal support in some cases (for example, China, euro
area) offsets some of the negative growth impact.
Given uncertainty over where trade policy could settle, the two alternative growth outlooks are
as follows:
• Under the pre–April 2 forecast, global growth would be 3.2 percent for both 2025 and 2026,
lower by 0.1 percentage point in each year compared with the January 2025 WEO Update.
This forecast deviates from the global assumptions listed above on trade policy
announcements, the level of uncertainty, and commodity prices. It is predicated on higher oil
prices and only those trade policies announced between February 1 and March 12, namely,
tariffs on Canada and Mexico, the first wave of tariffs on China, associated responses by
Canada and China, and sectoral tariffs on steel and aluminum. The downgrades to growth
under this outlook are largest for the countries directly involved, but growth in other
economies is also lower because of increased uncertainty relative to that in January and tariff-
related spillovers.

International Monetary Fund | April 2025 13

 WORLD ECONOMIC OUTLOOK

Table 1.1. Overview of the World Economic Outlook Reference Forecast

(Percent change, unless noted otherwise)
Difference from January Difference from October
Projections 2025 WEO Update 1 2024 WEO 1
2024 2025 2026 2025 2026 2025 2026
World Output 3.3 2.8 3.0 –0.5 –0.3 –0.4 –0.3
Advanced Economies 1.8 1.4 1.5 –0.5 –0.3 –0.4 –0.3
United States 2.8 1.8 1.7 –0.9 –0.4 –0.4 –0.3
Euro Area 0.9 0.8 1.2 –0.2 –0.2 –0.4 –0.3
Germany –0.2 0.0 0.9 –0.3 –0.2 –0.8 –0.5
France 1.1 0.6 1.0 –0.2 –0.1 –0.5 –0.3
Italy 0.7 0.4 0.8 –0.3 –0.1 –0.4 0.1
Spain 3.2 2.5 1.8 0.2 0.0 0.4 0.0
Japan 0.1 0.6 0.6 –0.5 –0.2 –0.5 –0.2
United Kingdom 1.1 1.1 1.4 –0.5 –0.1 –0.4 –0.1
Canada 1.5 1.4 1.6 –0.6 –0.4 –1.0 –0.4
Other Advanced Economies 2 2.2 1.8 2.0 –0.3 –0.3 –0.4 –0.3
Emerging Market and Developing Economies 4.3 3.7 3.9 –0.5 –0.4 –0.5 –0.3
Emerging and Developing Asia 5.3 4.5 4.6 –0.6 –0.5 –0.5 –0.3
China 5.0 4.0 4.0 –0.6 –0.5 –0.5 –0.1
India 3 6.5 6.2 6.3 –0.3 –0.2 –0.3 –0.2
Emerging and Developing Europe 3.4 2.1 2.1 –0.1 –0.3 –0.1 –0.4
Russia 4.1 1.5 0.9 0.1 –0.3 0.2 –0.3
Latin America and the Caribbean 2.4 2.0 2.4 –0.5 –0.3 –0.5 –0.3
Brazil 3.4 2.0 2.0 –0.2 –0.2 –0.2 –0.3
Mexico 1.5 –0.3 1.4 –1.7 –0.6 –1.6 –0.6
Middle East and Central Asia 2.4 3.0 3.5 –0.6 –0.4 –0.9 –0.7
Saudi Arabia 1.3 3.0 3.7 –0.3 –0.4 –1.6 –0.7
Sub-Saharan Africa 4.0 3.8 4.2 –0.4 0.0 –0.4 –0.2
Nigeria 3.4 3.0 2.7 –0.2 –0.3 –0.2 –0.3
South Africa 0.6 1.0 1.3 –0.5 –0.3 –0.5 –0.2
Memorandum
World Growth Based on Market Exchange Rates 2.8 2.3 2.4 –0.6 –0.4 –0.5 –0.3
European Union 1.1 1.2 1.5 –0.2 –0.2 –0.4 –0.2
ASEAN-5 4 4.6 4.0 3.9 –0.6 –0.6 –0.5 –0.6
Middle East and North Africa 1.8 2.6 3.4 –0.9 –0.5 –1.4 –0.8
Emerging Market and Middle-Income Economies 4.3 3.7 3.8 –0.5 –0.4 –0.5 –0.3
Low-Income Developing Countries 4.0 4.2 5.2 –0.4 –0.2 –0.5 –0.4
World Trade Volume (goods and services) 3.8 1.7 2.5 –1.5 –0.8 –1.7 –0.9
Imports
Advanced Economies 2.4 1.9 2.0 –0.3 –0.4 –0.5 –0.5
Emerging Market and Developing Economies 5.8 2.0 3.4 –3.0 –1.1 –2.9 –1.2
Exports
Advanced Economies 2.1 1.2 2.0 –0.9 –0.6 –1.5 –1.0
Emerging Market and Developing Economies 6.7 1.6 3.0 –3.4 –1.7 –3.0 –1.3
Commodity Prices (US dollars)
Oil 5 –1.8 –15.5 –6.8 –3.8 –4.2 –5.1 –3.2
Nonfuel (average based on world commodity import weights) 3.7 4.4 0.2 1.9 0.3 4.6 –0.6
World Consumer Prices 6 5.7 4.3 3.6 0.1 0.1 0.0 0.0
Advanced Economies 7 2.6 2.5 2.2 0.4 0.2 0.5 0.2
Emerging Market and Developing Economies 6 7.7 5.5 4.6 –0.1 0.1 –0.4 –0.1

14 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

Table 1.1. Overview of the World Economic Outlook Reference Forecast (continued)
(Percent change, unless noted otherwise)
Q4 over Q4 8
Difference from January Difference from October
Projections 2025 WEO Update 1 2024 WEO 1
2024 2025 2026 2025 2026 2025 2026
World Output 3.5 2.4 3.0 –0.8 –0.1 –0.7 ...
Advanced Economies 1.9 1.2 1.5 –0.7 –0.2 –0.5 ...
United States 2.5 1.5 1.7 –0.9 –0.4 –0.4 ...
Euro Area 1.2 0.7 1.4 –0.5 0.0 –0.6 ...
Germany –0.2 0.3 1.0 –0.5 0.1 –1.0 ...
France 0.6 0.8 1.0 –0.2 –0.2 –0.7 ...
Italy 0.6 0.8 0.9 –0.2 0.2 0.2 ...
Spain 3.4 2.0 1.7 0.1 –0.3 0.0 ...
Japan 1.2 –0.4 1.3 –1.2 0.6 –0.6 ...
United Kingdom 1.5 1.7 0.9 –0.1 –0.4 0.6 ...
Canada 2.4 0.6 2.2 –1.5 0.3 –1.5 ...
Other Advanced Economies 2 1.9 2.2 1.7 –0.6 0.0 –0.4 ...
Emerging Market and Developing Economies 4.8 3.3 4.0 –0.9 –0.2 –1.0 ...
Emerging and Developing Asia 5.8 4.0 4.7 –0.9 –0.4 –1.0 ...
China 5.4 3.2 4.2 –1.3 –0.3 –1.5 ...
India 3 7.5 6.2 6.3 –0.3 –0.2 –0.3 ...
Emerging and Developing Europe 3.0 1.8 2.0 –1.1 0.4 –0.9 ...
Russia 3.7 0.4 0.8 –0.8 –0.4 –0.8 ...
Latin America and the Caribbean 2.3 1.6 2.8 –1.1 0.4 –1.3 ...
Brazil 3.3 2.0 2.2 –0.1 –0.1 –0.2 ...
Mexico 0.5 –0.2 2.0 –1.6 –0.1 –1.6 ...
Middle East and Central Asia ... ... ... ... ... ... ...
Saudi Arabia 4.5 2.5 3.7 1.3 –0.4 –2.1 ...
Sub-Saharan Africa ... ... ... ... ... ... ...
Nigeria 3.5 3.7 2.8 0.0 –1.0 0.0 ...
South Africa 0.8 0.8 1.6 0.2 –0.6 –0.2 ...
Memorandum
World Growth Based on Market Exchange Rates 3.0 1.9 2.5 –0.8 –0.1 –0.7 ...
European Union 1.5 1.1 1.7 –0.4 0.0 –0.3 ...
ASEAN-5 4 4.7 3.6 4.3 –0.3 –0.7 0.6 ...
Middle East and North Africa ... ... ... ... ... ... ...
Emerging Market and Middle-Income Economies 4.8 3.3 4.0 –0.9 –0.2 –1.0 ...
Low-Income Developing Countries ... ... ... ... ... ... ...
Commodity Prices (US dollars)
Oil 5 –10.1 –14.1 –0.7 –9.1 1.5 –9.2 ...
Nonfuel (average based on world commodity import weights) 8.3 1.2 0.4 1.1 –0.1 0.7 ...
World Consumer Prices 6 4.8 3.5 3.0 0.0 0.0 0.0 ...
Advanced Economies 7 2.4 2.4 2.1 0.3 0.1 0.4 ...
Emerging Market and Developing Economies 6 6.7 4.4 3.6 –0.2 –0.2 –0.3 ...
Source: IMF staff estimates.
Note: See Box A2 of the Statistical Appendix for a list of economies whose projections have been revised based on developments in commodity markets and international trade as of
April 4, 2025. Real effective exchange rates are assumed to remain constant at the levels prevailing during March 6, 2025--April 3, 2025. Economies are listed on the basis of economic
size. The aggregated quarterly data are seasonally adjusted. WEO = World Economic Outlook.
1 Difference based on rounded figures for the current, January 2025 WEO Update, and October 2024 WEO forecasts.
2 Excludes the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.
3 For India, data and forecasts are presented on a fiscal year basis, and GDP from 2011 onward is based on GDP at market prices with fiscal year 2011/12 as a base year.
4 Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
5 Simple average of prices of UK Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in US dollars a barrel was $79.17 in 2024; the assumed price,

based on futures markets, is $66.94 in 2025 and $62.38 in 2026.

6 Excludes Venezuela. See the country-specific note for Venezuela in the "Country Notes" section of the Statistical Appendix.
7 The assumed inflation rates for 2025 and 2026, respectively, are as follows: 2.1 percent and 1.9 percent for the euro area, 2.4 percent and 1.7 percent for Japan, and 3.0 percent and

2.5 percent for the United States.

8 For world output, the quarterly estimates and projections account for approximately 90 percent of annual world output at purchasing-power-parity weights. For emerging market and

developing economies, the quarterly estimates and projections account for approximately 85 percent of annual emerging market and developing economies’ output at
purchasing-power-parity weights.

International Monetary Fund | April 2025 15

 WORLD ECONOMIC OUTLOOK

Table 1.2. Overview of the World Economic Outlook Reference Forecast at Market Exchange Rate Weights
(Percent change)
Difference from January Difference from October
Projections 2025 WEO Update 1 2024 WEO 1
2024 2025 2026 2025 2026 2025 2026
World Output 2.8 2.3 2.4 –0.6 –0.4 –0.5 –0.3
Advanced Economies 1.8 1.4 1.5 –0.6 –0.3 –0.4 –0.3
Emerging Market and Developing Economies 4.1 3.5 3.7 –0.6 –0.4 –0.6 –0.3
Emerging and Developing Asia 5.2 4.3 4.4 –0.6 –0.5 –0.5 –0.2
Emerging and Developing Europe 3.3 2.1 2.3 –0.2 –0.2 –0.2 –0.3
Latin America and the Caribbean 2.2 1.9 2.2 –0.6 –0.4 –0.5 –0.4
Middle East and Central Asia 2.0 2.9 3.6 –0.8 –0.4 –1.1 –0.5
Sub-Saharan Africa 3.7 3.7 4.2 –0.4 0.0 –0.4 –0.1
Memorandum
European Union 1.0 1.0 1.4 –0.3 –0.2 –0.5 –0.3
Middle East and North Africa 1.6 2.7 3.5 –0.9 –0.5 –1.3 –0.7
Emerging Market and Middle-Income Economies 4.2 3.5 3.6 –0.6 –0.5 –0.5 –0.3
Low-Income Developing Countries 3.9 4.2 5.3 –0.5 –0.2 –0.6 –0.4
Source: IMF staff estimates.
Note: The aggregate growth rates are calculated as a weighted average, in which a moving average of nominal GDP in US dollars for the preceding three years is used as the weight.. WEO =
World Economic Outlook.
1 Difference based on rounded figures for the current, January 2025 WEO Update, and October 2024 WEO forecasts.

• The post–April 9 model-based forecast incorporates the tariff announcements made after April 4
and, hence, not included in the reference forecast.
o On April 9, the United States announced a 90-day pause on the higher tariff rates
imposed on some countries but maintained the 10 percent minimum on all countries
while further raising tariffs on Chinese goods as a countermeasure to China’s tariff
response, which China then countered again. The EU responded with 25 percent tariffs
on a range of US imports, which were also paused for 90 days. On April 11, the United
States announced that it would exempt smartphones, laptops, and other electronic
devices and components from the April 2 tariffs, while China raised tariffs on US goods
further, with the higher rate taking effect on April 12. As of April 14—the cutoff date
for data and information used in this chapter—the US effective tariff rate on Chinese
goods was 115 percent, while that imposed by China on US goods was 146 percent, and
the US effective tariff rate on the world stood at about 25 percent, up from under 3
percent in January 2025.
o If the measures announced between April 5 and 14 were considered in isolation from
the associated market fallout and policy-induced uncertainty and assumed to be
permanent, global growth for 2025 would be about 2.8 percent for 2025 and about 2.9
percent for 2026. This is similar to the estimates for global growth in the reference
forecast, albeit with a different composition of growth rates across countries. The gains
from lower effective tariff rates for those countries that were previously subject to
higher tariffs would now be offset by poorer growth outcomes in China and the United
States—due to the escalating tariff rates—that would propagate through global supply
chains. Further, the losses in China and the United States would become larger in 2026
and beyond, while the gains in other regions would fade, leading to weaker global
outcomes than the reference forecast.

16 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

Growth Forecast for Advanced Economies

For advanced economies, growth under the reference forecast is projected to drop from an
estimated 1.8 percent in 2024 to 1.4 percent in 2025 and 1.5 percent in 2026. Growth for 2025 is
now projected to be 0.5 percentage point lower relative to that in January 2025 WEO Update
projections. The forecasts for 2025 include significant downward revisions for Canada, Japan,
the United Kingdom, and the United States and an upward revision for Spain.
• For the United States, growth is projected to decrease in 2025 to 1.8 percent, 1 percentage
point lower than the rate for 2024 as well as 0.9 percentage point lower than the forecast rate
in the January 2025 WEO Update. The downward revision is a result of greater policy
uncertainty, trade tensions, and a softer demand outlook, given slower-than-anticipated
consumption growth. Tariffs are also expected to weigh on growth in 2026, which is
projected at 1.7 percent amid moderate private consumption.
• Growth in the euro area is expected to decline slightly to 0.8 percent in 2025, before picking
up modestly to 1.2 percent in 2026. Rising uncertainty and tariffs are key drivers of the
subdued growth in 2025. Offsetting forces that support the modest pickup in 2026 include
stronger consumption on the back of rising real wages and a projected fiscal easing in
Germany following major changes to its fiscal rule (the “debt brake”). Within the region,
Spain’s momentum contrasts with the sluggish dynamics elsewhere. The growth projection
for 2025 for Spain is 2.5 percent, an upward revision of 0.2 percentage point from that in the
January 2025 WEO Update. This reflects a large carryover from better-than-expected outturns
in 2024 and reconstruction activity following floods.
• Among other advanced economies, several downward revisions stand out. For Canada,
growth forecasts are revised downward by 0.6 percentage point for 2025 and by 0.4
percentage point for 2026. This largely reflects the new tariffs on exports to the United States
that came into effect in March as well as heightened uncertainty and geopolitical tensions. For
Japan, the growth projection for 2025 is 0.6 percent, marking a downgrade of 0.5 percentage
point relative to the forecast in January. The effect of tariffs announced on April 2 and
associated uncertainty offset the expected strengthening of private consumption, with above-
inflation wage growth boosting household disposable income. For the United Kingdom, the
growth projection for 2025 is 1.1 percent, lower by 0.5 percentage point compared to the
forecast in January. This reflects a smaller carryover from 2024, the impact of recent tariff
announcements, an increase in gilt yields, and weaker private consumption amid higher
inflation as a result of regulated prices and energy costs.
Growth Forecast for Emerging Market and Developing Economies
For emerging market and developing economies, growth under the reference forecast is projected to
drop to 3.7 percent in 2025 and 3.9 percent in 2026, following an estimated 4.3 percent in 2024.
This is 0.5 and 0.4 percentage point lower, respectively, compared with the rate projected in the
January 2025 WEO Update.
• After a marked slowdown in 2024, growth in emerging and developing Asia is expected to decline
further to 4.5 percent in 2025 and 4.6 percent in 2026. Emerging and developing Asia,

International Monetary Fund | April 2025 17

 WORLD ECONOMIC OUTLOOK

particularly Association of Southeast Asian Nations (ASEAN) countries, has been among the
most affected by the April tariffs. For China, 2025 GDP growth is revised downward to 4.0
percent from 4.6 percent in the January 2025 WEO Update. This reflects the impact of
recently implemented tariffs, which offset the stronger carryover from 2024 (as a result of a
stronger-than-expected fourth quarter) and fiscal expansion in the budget. Growth in 2026 is
also revised downward to 4.0 percent from 4.5 percent in the January 2025 WEO Update on
the back of prolonged trade policy uncertainty and the tariffs now in place. For India, the
growth outlook is relatively more stable at 6.2 percent in 2025, supported by private
consumption, particularly in rural areas, but this rate is 0.3 percentage point lower than that in
the January 2025 WEO Update on account of higher levels of trade tensions and global
uncertainty.
• For Latin America and the Caribbean, growth is projected to moderate from 2.4 percent in 2024
to 2.0 percent in 2025, before rebounding to 2.4 percent in 2026. The forecasts are revised
downward by 0.5 percentage point for 2025 and 0.3 percentage point in 2026 compared with
those in the January 2025 WEO Update. The revisions owe largely to a significant downgrade
to growth in Mexico, by 1.7 percentage points for 2025 and 0.6 percentage point for 2026,
reflecting weaker-than-expected activity in late 2024 and early 2025 as well as the impact of
tariffs imposed by the United States, the associated uncertainty and geopolitical tensions, and
a tightening of financing conditions.
• Growth in emerging and developing Europe is projected to slow down considerably, from 3.4
percent in 2024 to 2.1 percent in 2025 and 2026. This reflects a sharp drop in growth in
Russia from 4.1 percent in 2024 to 1.5 percent in 2025 and to 0.9 percent in 2026 as private
consumption and investment decelerate amid reduced tightness in the labor market and
slower wage growth. Compared with that projected in the January 2025 WEO Update, growth
in Russia has been revised slightly upward for 2025 thanks to stronger-than-expected
outturns in the data for 2024. For Türkiye, growth is projected to bottom out in 2025 at 2.7
percent and accelerate to 3.2 percent in 2026, owing to recent pivots in monetary policy.
• The Middle East and Central Asia is projected to come out of several years of subdued growth,
with the rate accelerating from an estimated 2.4 percent in 2024 to 3.0 percent in 2025 and to
3.5 percent in 2026 as the effects of disruptions to oil production and shipping dissipate and
the impact of ongoing conflicts lessens. Compared with that in January, the projection is
revised downward, reflecting a more gradual resumption of oil production, persistent
spillovers from conflicts, and slower-than-expected progress on structural reforms.
• For sub-Saharan Africa, growth is expected to decline slightly from 4 percent in 2024 to 3.8
percent in 2025 and recover modestly in 2026, lifting to 4.2 percent. Among the larger
economies, the growth forecast in Nigeria is revised downward by 0.2 percentage point for
2025 and 0.3 percentage point for 2026, owing to lower oil prices, and that in South Africa is
revised downward by 0.5 percentage point for 2025 and 0.3 percentage point for 2026,
reflecting slowing momentum from a weaker-than-expected 2024 outturn, deteriorating
sentiment due to heightened uncertainty, the intensification of protectionist policies, and a
deeper slowdown in major economies. South Sudan has a downward revision of 31.5

18 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

percentage points for 2025 on account of the delay in in the resumption of oil production
from a damaged pipeline.
Inflation Forecast
Under the reference forecast, global Figure 1.17. Inflation Forecasts
headline inflation is expected to decline to 3.5 1. Evolution of 2025 Inflation Forecasts 4.5
4.3 percent in 2025 and to 3.6 percent in 3.0 (Median, percent, year over year)

2026. Inflation is projected to converge 2.5 3.5

back to target earlier in advanced 2.0
1.5 United States 2.5
economies, reaching 2.2 percent in 2026, Euro area
1.0 China
compared with emerging market and AEs excluding US and euro area
0.5 EMDEs excluding China (right scale) 1.5
developing economies, for which it 0.0
declines to 4.6 percent over the same time –0.5 0.5
Jan. Apr. Jul. Oct. Jan. Apr.
horizon. Compared with that in the 2024 24 24 24 25 25
January 2025 WEO Update, the global
inflation forecast is slightly higher for 0.4 2. Distribution of One-Year-Ahead Inflation Projections
(Density)
2025. April 2019 WEO
0.3 April 2024 WEO
For advanced economies, the inflation April 2025 WEO

forecast for 2025 has been revised 0.2

upward by 0.4 percentage point since

0.1
January. The United Kingdom and the
United States stand out in both the 0.0
direction and the magnitude of their –1 0 1 2 3 4 5 6 7 8
revisions. Compared with those in the
Source: IMF staff calculations.
January 2025 WEO Update, the UK Note: In panel 1, the x-axis shows the months the World Economic Outlook (WEO)
inflation forecast has been revised upward isinflation
published. Panel 2 displays the distribution of one-year-ahead year-over-year
projections from the WEO reports using estimated kernel densities. The
by 0.7 percentage point and the US panel shows the 50 largest economies excluding Argentina, Bangladesh, Egypt,
Iran, Nigeria, Pakistan, Türkiye, and Ukraine. AEs = advanced economies; EMDEs
forecast by 1.0 percentage point. For the = emerging market and developing economies.
United States, this reflects stubborn price dynamics in the services sector as well as a recent
uptick in the growth of the price of core goods (excluding food and energy) and the supply
shock from recent tariffs. In the United Kingdom, it primarily reflects one-off regulated price
changes. In the euro area, the forecast is unchanged.
Among emerging market and developing economies, the revisions are mixed. In emerging and
developing Asia, inflationary pressures are expected to be even more muted, with a downward
revision of 0.5 percentage point to 2025 forecasts relative to those in January. After a series of
downward surprises, inflation in China is expected to remain subdued (Figure 1.17, panel 1). In
emerging and developing Europe, Russia and Ukraine have seen upward revisions for 2025, and
Russia for 2026, driving overall revisions of 1.5 percentage points in 2025 and 1.0 percentage
point in 2026. In Latin America and the Caribbean, upward revisions for Bolivia, Brazil, and
Venezuela have been offset by downward revisions for Argentina and elsewhere, bringing the
overall revision for the region for 2025 to –0.3 percentage point.

International Monetary Fund | April 2025 19

 WORLD ECONOMIC OUTLOOK

The inflation outlook as a whole has improved but has not yet fully returned to prepandemic
patterns (Figure 1.17, panel 2), and it is subject to high uncertainty. In particular, the effects of
recently imposed tariffs on inflation across countries will depend on whether the tariffs are
perceived to be temporary or permanent, the extent to which firms adjust margins to offset
increased import costs, and whether imports are invoiced in US dollars or local currency (see
Box 1.2). Cross-country implications will differ too. Trade tariffs act as a supply shock on
tariffing countries, reducing productivity and increasing unit costs. Tariffed countries face a
negative demand shock as export demand diminishes, exerting downward pressure on prices. In
both cases, trade uncertainty adds a layer of demand shock as businesses and households
respond by postponing investment and spending, and this effect may be amplified by tighter
financial conditions and increased exchange rate volatility.
Medium-Term Outlook
Lacking structural reform momentum and Figure 1.18. Medium-Term Outlook
(Percent)
facing headwinds from a range of challenges,
7 45-degree line
global economic performance is expected to AEs
EMDEs
remain mediocre. The five-year-ahead growth 6
2030 growth forecast, April 2025 WEO
forecast stands at 3.2 percent, below the 5

historical average during 2000–19 of 3.7 4

percent. For many emerging market and 3
developing economies, as well as for quite a
2
few advanced economies, current medium-
1
term growth forecasts fall short of those made
in 2020 (Figure 1.18). The fact that the 0
0 1 2 3 4 5 6 7 8
moderation of medium-term growth is more 2025 growth forecast, January 2020 WEO Update

evident among emerging market and Source: IMF staff calculations.

Note: Figure plots 50 largest economies (21 AEs and 29 EMDEs) in terms of 2024
developing economies implies a slowdown in GDP in purchasing-power-parity international dollars. AEs = advanced economies;
EMDEs = emerging market and developing economies; WEO = World Economic
income convergence (Chapter 3 of the April Outlook.
2024 WEO).
A key and increasingly common driver of these sluggish medium-term growth dynamics is
demographics. Population aging is expected to weigh significantly on productivity, labor force
participation, and ultimately, growth (Chapter 2). Population movements across borders could
help alleviate some of the demographic drag, and policies governing these movements can have
complex spillovers onto growth (Chapter 3).
World Trade Outlook
Global trade growth is expected to slow down in 2025 to 1.7 percentage point, a downward
revision of 1.5 percentage point since the January 2025 WEO Update. This forecast reflects
increased tariff restrictions affecting trade flows and, to a lesser extent, the waning effects of
cyclical factors that have underpinned the recent rise in goods trade.
Meanwhile, global current account balances are expected to narrow somewhat (Figure 1.19).
The widening of current account balances in 2024 reflected widening domestic imbalances and a
pickup in global goods trade. Over the medium term, global balances are expected to narrow

20 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

gradually as the effects of these factors Figure 1.19. Current Account and International Investment
Positions
wane. Creditor and debtor stock positions (Percent of global GDP)
are estimated to have increased in 2024,
European creditors United States
with the increases reflecting widening European debtors China
current account balances. They are Japan Others
Oil exporters Overall balance (right scale)
expected to moderate slightly over the
medium term as current account balances 3 1. Global Current Account Balance 6

gradually narrow. In some economies, 2 4

gross external liabilities remain large from 1 2
a historical perspective and pose risks of 0 0
external stress.
–1 –2

Risks to the Outlook: Tilted to –2 –4

the Downside –3 –6
2005 07 09 11 13 15 17 19 21 23 25 27 29 30
Overall, risks to the outlook are tilted to
30 2. Global International Investment Position
the downside, in both the short and the
20
medium term. This section discusses the
10
most prominent risks and uncertainties
surrounding the outlook in detail. Box 1.1 0

presents model-based analysis that –10

quantifies risks to the global outlook and –20

plausible scenarios. –30
2005 07 09 11 13 15 17 19 21 23 25 27 29 30
Downside Risks
Source: IMF staff calculations.
Although some risks outlined in the Note: “European creditors” are Austria, Belgium, Denmark, Finland, Germany, Italy,
Luxembourg, The Netherlands, Norway, Sweden, and Switzerland; “European
January 2025 WEO Update have debtors” are Cyprus, Greece, Ireland, Portugal, Slovenia, and Spain; “oil exporters”
are Algeria, Azerbaijan, Iran, Kazakhstan, Kuwait, Nigeria, Oman, Qatar, Russia,
materialized and are now incorporated in Saudi Arabia, the United Arab Emirates, and Venezuela.
the reference forecast, the likelihood of
additional adverse risks being realized is increasing.
Escalating trade measures and prolonged trade policy uncertainty: Box 1.1 illustrates the
impact of ratcheting up a trade war. World GDP would be negatively affected, though the
magnitude of the effect would vary across countries. Those directly targeted by new tariffs
would be most affected, notably China and the United States, but also a large set of countries in
Asia and Europe in the medium term. Some countries may harness the opportunity to
consolidate their trade networks, reconfigure their position in global value chains, and, hence,
experience positive effects, especially if traded goods embed a rising share of domestic value
added, as seen in the case of Vietnam in 2018 (Schulze and Xin, forthcoming). However, adverse
effects could accumulate over time. Their magnitude would depend on how quickly countries
can boost domestic consumption, reroute trade flows, and increase productivity and
competitiveness, as well as on the reach and intensity of the countermeasures, including
nontariff measures. The emergence of new trading clusters is likely to fragment FDI flows and
weigh on capital accumulation (see Chapter 4 of the April 2024 WEO). Rising geopolitical
tensions could open up the possibility of sudden changes in the international monetary system,

International Monetary Fund | April 2025 21

 WORLD ECONOMIC OUTLOOK

with potential implications for macrofinancial stability. A reversal of global economic integration
might also trigger suboptimal relocation of production units and technological decoupling, with
negative growth effects in the longer term because of resource misallocation, loss of knowledge
hubs, contraction in bank credit, and financial stability risks (Aiyar and others 2023; Campos and
others 2023; Gopinath and others 2024; Figure 1.20. Rising Trade Restrictions and Fragmentation
Chapter 2 of the April 2025 GFSR). Concerns

A trade war could also fuel inflationary 3,500 1. Trade-Restrictive Measures

(Number of measures)
pressures, primarily through rising import 3,000
Goods Services Investments
prices (Fajgelbaum and Khandelwal 2022). 2,500
Although the simulations in Box 1.1 2,000

indicate rather moderate effects, several 1,500

factors could lead to higher inflationary 1,000

pressures in some countries. First, with 500

more than 80 percent of trade invoicing in 0

2009 11 13 15 17 19 21 23 25
US dollars, additional pressure may arise if
the US dollar appreciates, as observed 400 2. Fragmentation Keywords in Earnings Calls
during previous episodes of trade (Indices, 2013–15 = 100)

uncertainty and financial market volatility. 300

Second, inflation expectations are
200
currently higher than central bank targets
and, in some cases, on the rise. Third,
100
restrictions on commodities may lead to
significant price shifts, particularly since 0
price elasticities of critical minerals and 2009: 11: 13: 15: 17: 19: 21: 23: 25:
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
highly traded agricultural goods are
especially vulnerable to trade Sources: Global Trade Alert; Refinitiv Eikon; and IMF staff calculations.
Note: In panel 1, data are based on a count of measures and include adjustment
fragmentation because of their for reporting lags. In panel 2, fragmentation indices measure the average number
of sentences, per thousand earnings calls, that mention at least one of the
concentrated production, difficulties in following keywords: deglobalization, reshoring, onshoring, nearshoring, friend-
substitution, and essential roles in shoring, localization, regionalization.

manufacturing and key technologies (see Chapter 3 of the October 2023 WEO). Price increases
are also likely to have negative distributional effects across and within countries. Tariffs on
agricultural commodities could raise food security concerns, particularly in low-income
countries. Tariffs tend to raise prices of tradables, on which poor households spend relatively
more (Cravino and Levchenko 2017; Carroll and Hur 2020), and may increase returns to capital
over labor, benefiting the wealthy. Welfare losses are typically concentrated among the poor and
the retired, even when tariff revenues offset distortionary taxes (Carroll and Hur 2023).
Beyond the risk of additional trade barriers, prolonged uncertainty regarding trade policies
poses other risks to investment and growth (Box 1.1 shows the effect of increased uncertainty
over macroeconomic policies more generally). In just the first quarter of 2025, the number of
new restrictive measures announced increased by 16 percent relative to that in December 2024,
with actions ratcheting from April 2 onward. Firms’ concerns about fragmentation spiked along

22 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

with the escalation in the use of Figure 1.21. Spillovers from US Dollar Appreciation
restrictive measures (Figure 1.20). If 6 1. Effect of US Dollar Appreciation on Global GDP
uncertainty remains high for long, firms (Percent change)
4
may delay investment projects, with a Advanced economies
2 Emerging market economies
consequent reduction in global
investment. Indeed, empirically, trade 0

uncertainty is estimated to have reduced –2

US investment by approximately 1.5 –4

percent in 2018 (Caldara and others –6
2020). Moreover, uncertainty diminishes 0 4 8 12
Quarter
demand by undermining confidence and
200 2. Effect of US Dollar Appreciation on EMDE Inflation 1.0
erodes consumer income in the medium (Basis points; Percent, right scale)
term by curtailing investment and stifling 150 12-month pass-through to inflation from 0.8
trade (Handley and Limão 2017). US dollar appreciation
Pass-through elasticity (right scale) 0.6
Previous episodes of heightened trade 100
policy uncertainty led to persistent 0.4

appreciation of the US dollar (Albrizio 50

0.2
and others, forthcoming), harming
0 0.0
exports from the United States and TUR ZAF BRA IDN POL ROU HUN MEX CHL IND COL
dollarized countries and generating
Source: IMF staff calculations.
negative spillovers to emerging market Note: In panel 1, impulse responses from the IMF External Sector Report 2023
and developing economies. If, in the show the effects of a 10 percent appreciation in the nominal US dollar index with 90
percent confidence intervals. Real GDP is measured in national currencies at
current episode, a US dollar appreciation constant prices. “Advanced economies” exclude countries with weights in the US
dollar index that are larger than 4 percent in 2020: Canada, France, Germany,
was to materialize, inflation pressures Ireland, Italy, Japan, Switzerland, and the United Kingdom. In panel 2, estimates
could be sizable where country-specific are based on Carrière-Swallow and others' (2021) bilateral pass-through and
foreign exchange depreciation against the US dollar between mid-September 2024
circumstances amplify the amount of and the beginning of January 2025. Data labels in the figure use International
Organization for Standardization (ISO) country codes. EMDE = emerging market
pass-through from currency depreciation and developing economy.
(Figure 1.21), especially in periods of high
uncertainty and already-elevated inflation levels (Carrière-Swallow and others 2024). However,
the policy-uncertainty-driven surge in risk aversion and the decline in US growth prospects
might lead to a depreciation of the US dollar. A disorderly and large depreciation of the US
dollar could bring additional financial market volatility.
Financial market volatility and correction: In some countries, if inflation persists or regains
upward momentum because of new policies, central banks may maintain interest rates at higher
levels than currently anticipated. This could result in cross-country interest rate differentials,
which could trigger capital outflows, and tighter financial conditions, especially in emerging
market and developing economies (as illustrated in Box 1.1). Financial market risks may be
compounded by future corporate earnings failing to meet expectations, large and unpredictable
policy shifts, or renewed geopolitical risks (see Chapter 2 of the April 2025 GFSR). The US
dollar would typically be expected to appreciate if financial conditions deteriorate sharply, but
the international monetary system could experience a sudden reset, with potentially major
implications for the dollar as its main pillar. Worsening global financial conditions and broader
disruptions to the system could trigger balance of payments crises in small countries with limited

International Monetary Fund | April 2025 23

 WORLD ECONOMIC OUTLOOK

market access, high refinancing needs, and weak negotiation capacity. These risks may be
amplified for commodity exporters amid a continued decline in commodity prices, particularly
those for oil and copper, which typically serve as indicators of an impending recession by
signaling a slowdown in industrial activity in importers, such as China. A deeper financial market
correction than what was recently experienced could be triggered by weaker-than-expected US
growth, in part induced by policy shifts, and reverberate through highly leveraged positions in
nonbank financial institutions and firms with high near-term refinancing needs. In addition, an
excessive rollback of financial regulations may lead to boom-bust dynamics, with negative
repercussions for household wealth, raising systemic stress and creating adverse spillover effects
throughout the global economy. In Europe, a market correction may occur if peace negotiations
in Ukraine fail to reach a lasting resolution.
Rising long-term interest rates: Further pressure on already-high US bond yields, coupled
with persistent exchange rate volatility driven by additional policy shifts and sustained policy
uncertainty, could also trigger capital and FDI outflows from emerging market and developing
economies. The growing concentration of capital in safe haven countries and assets could
exacerbate capital imbalances and misallocation. Moreover, the structural pressure on long-term
yields could constrain the fiscal space, already limited, that is necessary to heal the economic
scars left by the pandemic or meet new spending needs, or it could exacerbate fiscal
sustainability concerns, especially in Figure 1.22. Number and Costs of Natural Disasters
high-debt countries (see the April 2025 Floods Storms
Fiscal Monitor). Consequently, this Wildfires Extreme temperatures
Droughts
could lead to a debt spiral dynamic in
which borrowing costs escalate as 500 1. Number of Natural Disasters
(Number of incidents, three-year moving average)
fiscal adjustments become increasingly 400
unattainable.
300
Rising social discontent: The
legacy of the cost-of-living crisis, 200

combined with reduced medium-term 100

growth prospects, may exacerbate
0
polarization and social unrest, 2000 02 04 06 08 10 12 14 16 18 20 22 24
hindering necessary reforms for
400 2. Costs of Natural Disasters
growth. Currently, the risk of unrest is (Billions of US dollars, CPI adjusted)
pronounced in Africa, where conflicts
300
and rising food and energy prices have
had a severe impact on vulnerable 200
nations with limited fiscal space, and in
Asia, where democratic participation in 100
some incumbent regimes is limited and
inequalities are rising (Barrett and 0
2000 02 04 06 08 10 12 14 16 18 20 22 24
others 2022). Although emerging
market and developing economies Sources: EM-DAT: The International Disaster Database; and IMF staff calculations.
Note: Panel 1 is a stacked-area figure in which the values for each disaster type are
have demonstrated resilience over the cumulatively added to show their combined total over time. CPI = consumer price
index.

24 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

past four years, their capacity to manage domestic challenges, especially high debt levels, in a
deteriorating global environment may be tested. A resurgence in food and energy price inflation,
driven by commodity market fragmentation or intensification of climate-related disasters, could
worsen living conditions and heighten food security concerns, particularly in low-income
countries. Across regions, a common element of social unrest episodes relates to discontent
about public representation and governance, which may increase the likelihood of structural
reform failure (see Chapter 3 of the October 2024 WEO).
Increasing challenges to international cooperation: The increasing frequency and economic
cost of natural disasters (Figure 1.22) and the intensification of conflicts—disruptive, even if
localized—demand continuous and coordinated international action. Scaling back climate adaptation
and international aid would risk making past investments ineffective, undermining progress toward a
greener and more resilient economy and eroding human capital where it is most needed. If a lack of
financial support were suddenly to materialize, living and health conditions would deteriorate in low-
income and fragile countries, which might face social unrest and be forced to rely on public
financing, further exacerbating their debt vulnerabilities. The macroeconomic consequences for aid-
receiving countries might be substantial, including worsening of current accounts, decline in foreign
reserves, pressure on exchange rates and prices, and lower consumption and investment.
Labor supply gaps: Many nations have relied on foreign workers to address labor shortages,
particularly following COVID-19. While a retrenchment of foreign-worker flows to advanced
economies might ease strains on local services and infrastructure and provide a small boost to
incomes, output would decline in recipient countries—and globally—in the long term (see
Chapter 3). The resulting decline in labor supply may pose fiscal sustainability risks and hinder
potential growth, especially in countries where legal immigrants tend to be well integrated and
their skills meet and complement labor market needs.

Upside Risks
Despite the increased prevalence of negative risks, some factors could lead to more favorable
outcomes than those in the reference forecast.
Next-generation trade agreements: Continued elevated trade policy uncertainty could spark
new momentum toward regional, plurilateral, and multilateral agreements, which could mitigate
risks and foster policy predictability. Nondiscriminatory agreements that cover a broad set of
areas, including digital and services trade and investment, could facilitate broad-based gains
without introducing new distortions. Ultimately, expanding and deepening international
cooperation and regional integration (for example, the EU’s single market) could increase
investment, boost productivity, raise potential growth, and enhance countries’ resilience to
external shocks, by expanding the reference market and diversifying trading partners (Albrizio
and others 2025).

Mitigation of conflicts: A resolution or mitigation of ongoing conflicts could lead to a

decrease in global commodity prices and reallocate resources for productive uses. The economic
impact of war can be substantial, with studies showing that the “war tax” on growth can reach
30 percent of GDP, contributing to inflation rates as high as 15 percent (Federle and others

International Monetary Fund | April 2025 25

 WORLD ECONOMIC OUTLOOK

2024), with neighboring countries most affected on average. Cessation of hostilities, along with
subsequent reconstruction efforts, would not only boost GDP growth in countries directly
involved in conflicts but would also have a positive influence on neighboring nations. This
influence could manifest itself through the alleviation of negative spillovers, which are estimated
to be on average between 5 percent and 10 percent of GDP over the five to seven years
following the onset of conflict (see Chapter 2 of the April 2024 Regional Economic Outlook: Middle
East and Central Asia), and through the generation of positive spillovers. For instance, a ceasefire
in Ukraine has the potential to raise growth in the region, through a rebound in consumer
confidence and reduction in energy prices, especially in Europe. However, countries that have
invested in alternative infrastructures or energy sources to manage conflict-related shortages may
experience negative spillovers for some time if reversals prevent them from achieving the
expected returns.
Structural reform momentum: A generalized acceleration of structural reforms, partly
reinforced by peer benchmarking among nations and challenging global macroeconomic
conditions, could significantly boost growth. Streamlining regulations and reducing red tape
would unlock market entry and increase competition, enhancing business dynamism and
resource reallocation (as Box 1.1 illustrates for the case of China). More integrated financial,
labor, and product markets could provide the depth and scale to drive more innovation and
accelerate productivity growth. In Europe, tackling remaining internal barriers would allow firms
to scale up. Accelerating European integration by reducing regulatory obstacles and
strengthening the Capital Markets Union could increase investment, lift productivity, and raise
potential growth. Such an approach would bolster the underdeveloped European capital market,
contributing to a reduction of global imbalances.

Growth engine powered by artificial intelligence (AI): Optimism about AI, coupled with
an expected significant annual reduction in AI usage costs and future technological
advancements, could boost productivity and consumption significantly. The integration of AI
technologies could lead to knowledge spillovers across industries and regions, fostering
innovation and driving down costs globally. These gains could materialize without significant
adverse effects on employment if AI adoption is accompanied with policies that upgrade
regulatory frameworks and support labor reallocation (Cazzaniga and others 2024). They could
also materialize without escalating electricity prices and environmental costs if policymakers, in
collaboration with businesses, seize the opportunity by embracing and incentivizing renewable
energy sources and innovative production paradigms (see the Commodity Special Feature).

Policies: Navigating Uncertainty and Enhancing Preparedness to

Ease Macroeconomic Trade-offs
The global economy is at a critical juncture, with substantial policy pivots and uncertainty. A
range of plausible alternatives are possible, shaped by rapidly changing trade policies. In the face
of ongoing structural shifts, heightened uncertainty, and persistently weak growth, policies
should focus on steps to restore confidence and stability, reduce imbalances, and sustainably lift
growth. Reducing policy-induced uncertainty and resolving trade tensions can promote a more

26 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

stable environment, bolster consumption, and facilitate investment. In the short term, countries
need to calibrate monetary and prudential policies carefully to maintain price and financial
stability. Gradually rebuilding fiscal space remains critical for managing increased public
spending needs and building sufficient buffers to address future shocks, which could be sizable
and recurrent. To uplift growth prospects in the medium term, it remains urgent to deliver on
structural reforms, while prudently harnessing the benefits of technological advances.
Managing Trade Tensions and Prolonged Elevated Trade Policy Uncertainty
Delivering a stable and predictable trade environment. Countries should work constructively to
urgently resolve trade tensions and promote clear and transparent trade policies to stabilize
expectations, avoid investment distortions, and reduce volatility while avoiding steps that could
further harm the world economy (Georgieva 2025). In the wake of greater trade policy
uncertainty, pragmatic cooperation and deeper economic integration (Rotunno and Ruta,
forthcoming) can help countries expand trade either through nondiscriminatory unilateral
reductions of trade barriers or at the regional, plurilateral, or multilateral level, as free trade
agreements (accession of the United Kingdom to the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership and the EU–New Zealand trade agreement) have
shown. Greater regional integration, such as that involved in deepening the EU single market
(October 2024 Regional Economic Outlook: Europe) or continuing efforts toward African
Continental Free Trade Area implementation (El Ganainy and others 2023) can similarly
enhance global efficiency even in the presence of distortionary trade policies.
Broad subsidies generate large fiscal costs and additional distortions and are thus not a well-
suited tool for countering domestic or external distortions. However, in specific cases, targeted
industrial policies can alleviate sectoral market failures as a result of externalities or economies of
scale. Yet industrial policies are costly and can lead to various forms of government failures, in
turn leading to misallocation of resources (Ilyina, Pazarbasioglu, and Ruta 2024). Poorly targeted
industrial policies can drive production away from underlying patterns of comparative
advantage, create regional or global oversupply, and result in changes in terms of trade that
reduce domestic welfare (Hodge and others 2024). Amid limited fiscal space, industrial policy
programs should be subjected to a comprehensive cost-benefit analysis. To minimize distortions,
industrial policies should be targeted narrowly to specific objectives in sectors in which
externalities or market failures are well identified. Finally, cooperation regarding industrial policy
approaches among international trading partners can reduce negative spillovers (Brandão-
Marques and Toprak 2024).
Preserve international cooperation. International cooperation, including cooperation through
regional and cross-regional groups, is essential to sustain global growth, tackle common
problems, and mitigate cross-country spillovers. In several policy areas, including trade,
industrial policy, international taxation, climate, and development and humanitarian assistance,
international cooperation and platforms (Aiyar and others 2023) can mitigate global spillovers
and protect the vulnerable. International tax cooperation can diminish the effects of ongoing
harmful tax competition by preventing a race to the bottom in global corporate taxes. In low-
income countries, multilateral assistance will become even more important for addressing budget
and development needs if bilateral foreign aid flows decline.

International Monetary Fund | April 2025 27

 WORLD ECONOMIC OUTLOOK

Maintaining Price and Financial Stability

Calibrate monetary policy amid two-sided risks. As countries are experiencing a multifaceted
combination of shocks, central banks need to carefully calibrate monetary policy to country-
specific circumstances. Trade policy shocks adversely weigh on supply while persistent
uncertainty and negative wealth effects from the April 2025 asset price correction dampen
aggregate demand. As these shocks unfold, central banks should monitor the interplay of
sectoral supply pressures and sectoral demand, because a steepening of sectoral supply curves
could trigger renewed inflationary pressures (see Chapter 2 of the October 2024 WEO). Where
near-term inflation risks are tilted to the upside or inflation expectations are rising, future cuts to
the policy rate should remain contingent on evidence that inflation is heading decisively back
toward target. This can ensure inflation expectations remain anchored while guarding against the
risk of premature monetary policy easing followed by later rate hikes. Without price stability, any
gains from future growth are at risk of being more than offset by a renewed cost-of-living
squeeze. Central banks need to be particularly vigilant regarding those risks after the recent
period of prolonged inflation and should be ready to act forcefully, because inflation
expectations may be much less stable in instances of renewed inflationary pressures. If growth is
declining or labor markets are softening while inflationary pressures and inflation expectations
are clearly returning toward target, maintaining a constant level of nominal policy rates will, over
time, result in a restrictive real policy stance as inflation declines while growth weakens. In these
circumstances, gradual reductions in the policy rate to move the policy stance closer to the
neutral rate are appropriate. Overall, in the face of elevated uncertainty, there is a premium on
clear communication, which can enhance predictability for all economic agents.
Elevated uncertainty also intensifies the trade-off between anchoring inflation expectations and
safeguarding financial stability. Where central banks’ efforts to stabilize inflation expectations
lead to a tightening of financial conditions, this may exacerbate vulnerabilities within the
financial system, complicating operations for financial institutions (Bergant and others 2025).
Therefore, it is crucial to strike a balance between maintaining stable inflation expectations and
ensuring that financial stability is not compromised, particularly amid financial market volatility.
Mitigate disruptive foreign exchange volatility. Persistent trade policy uncertainty, broader policy
shifts, cross-country divergence in paths to monetary policy normalization, and a more volatile
currency outlook could further amplify recent bouts of financial market volatility. This could
trigger disruptive capital outflows, which would particularly affect countries with higher import
dependence or a greater share of dollar-invoiced imports. The IMF’s Integrated Policy
Framework provides guidance tailored to country-specific conditions on appropriate policy
responses.
In countries with well-functioning and deep foreign exchange markets and low levels of
foreign-currency debt, exchange rate flexibility and raising policy rates are advisable. Financial
market policies, including rapid, decisive, and well-designed liquidity support, are suitable tools
for mitigating bouts of foreign exchange market volatility that emanate from trade partners’
policies or from US dollar movements. At the same time, for countries with shallow foreign
exchange markets or sizable amounts of foreign-currency-denominated debt, an abrupt

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 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

tightening of global financial conditions may trigger disruptive foreign exchange volatility and
rising risk premiums, which could pose risks to macrofinancial stability. In these circumstances,
while maintaining suitable monetary and fiscal policies, temporary foreign exchange
interventions or capital flow management measures could be appropriate. These should be
complemented with macroprudential measures to mitigate disruptions from large foreign-
currency-denominated debt holdings and financial market reforms to deepen domestic capital
markets over the medium term.
Safeguard financial stability through prudential policy. High uncertainty about the economic outlook
and financial market volatility puts a premium on robust prudential policies to safeguard
financial stability. Jurisdictions experiencing financial market stress should release available
macroprudential buffers to support the provision of credit to the economy and avoid a broad
tightening of financial conditions and cascades of business failures and bankruptcies. Should
stress levels reach crisis proportions, authorities should be ready to deploy liquidity and fiscal
instruments to avoid excessive deleveraging and damage to the real sector. Where regulatory
changes are being implemented, financial stability policies—including macroprudential policies
and Basel III reforms—should be maintained to strengthen the supervision of financial
institutions and the monitoring of financial stability risks. Enhancing reporting requirements and
strengthening policies to mitigate vulnerabilities in nonbank financial institutions are crucial for
reaping the benefits of the latter’s role in financial intermediation.
Rebuilding Fiscal Buffers to Regain Budgetary Maneuver Space
Restoring fiscal space and putting public debt on a sustainable path, while meeting important
spending needs to ensure national and economic security, remains a priority. This requires
credible medium-term fiscal consolidation with decisive yet growth-friendly adjustments.
Greater fiscal discipline would also help contain borrowing costs and thus provide a guardrail
against the risk of high or higher interest rates amid higher term premiums and upside risks to
inflation in some countries. Fiscal adjustment plans should focus primarily on credibly rebuilding
buffers to keep financing costs reasonable, help anchor medium-term inflation expectations, and
contain risks relating to sovereign rating downgrades. Moreover, countries should reprioritize
expenditures and boost fiscal revenues, including by broadening their tax bases; permanent
increases in spending should be financed with revenues, and a greater focus on enhancing public
sector spending efficiency may be warranted, particularly if fiscal space is constrained. Where
negative demand shocks from recent tariffs and trade policies are large, automatic stabilizers can
dampen their impact. New discretionary measures—designed to be well targeted and temporary
and with clear sunset clauses—should be deployed only for households, firms, or industries
affected by severe trade dislocations.
Devise adjustment plans to restore fiscal sustainability. For many countries, current fiscal policies fall
short of what is needed to ensure that debt has a high probability of stabilizing (Chapter 1 of the
April 2025 Fiscal Monitor). A credible fiscal adjustment plan would be grounded in realistic
assumptions about growth, debt-servicing costs, revenue mobilization, and spending needs. For
countries where new spending needs arise, demonstrating a clear commitment to safeguarding
debt sustainability, the integrity of fiscal rules, and fiscal policy transparency are crucial. In
countries with fiscal space, net expenditures, excluding defense investment, should remain

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 WORLD ECONOMIC OUTLOOK

bound to already-agreed-upon commitments. In economies with limited fiscal space, both

permanent and temporary increases in fiscal outlays should be financed by fiscal revenues and
spending reprioritization.
The strengthening of medium-term fiscal frameworks and fiscal rules can support fiscal
adjustment plans, as can greater fiscal transparency, including that in regard to contingent
liabilities and debt-creating flows outside the fiscal deficit. Binding legislation and clear
contingencies on how governments will respond to unexpected changes in economic
conditions—changes in growth, interest rates, or spending needs—under realistic assumptions
can further bolster credibility.
For countries in or at high risk of debt distress or facing potential noncompliance with fiscal
regulations, achieving fiscal sustainability may require not only fiscal consolidation, but also debt
restructuring. Furthermore, progress in the implementation of international sovereign debt
resolution frameworks, including the Group of Twenty (G20) Common Framework, and
increased consensus at the Global Sovereign Debt Roundtable (GSDR), will make debt
restructuring (when necessary) less costly.
Enact targeted fiscal reforms. Careful design and composition of fiscal adjustment plans can
prevent prolonged negative growth effects, with specific policy mixes requiring country-specific
calibration. In advanced economies, expenditure reprioritization, entitlement reforms, and
revenue increases through indirect taxes or removal of inefficient incentives, depending on
countries’ circumstances (April 2025 Fiscal Monitor), can support fiscal adjustment. Emerging
market and developing economies have greater space to strengthen domestic revenue
mobilization, needed to meet spending needs and boost job creation. Measures include
broadening tax bases, by reducing informality as well as taking other measures, and enhancing
revenue administration capacity. Across countries, there is scope for reducing inefficient
subsidies. Gradual reforms, announced and implemented during more favorable macroeconomic
conditions and combined with redistribution policies, can enhance public support for major
expenditure reform in areas such as energy subsidies and pension reform (Chapter 2 of the April
2025 Fiscal Monitor).
Protect growth and the vulnerable. Fiscal adjustments need to be carefully calibrated to avoid
negative impacts on potential growth and mitigate distributional impacts. Growth-friendly
elements of spending, such as high-quality public investments in infrastructure and digitalization,
can lift medium-term growth potential and should be protected. Spending on growth priorities
can be complemented with structural reforms to labor markets and regulation. Protecting the
poor and the vulnerable can further cushion the impact on inequality and enhance social
acceptability of fiscal reforms. Eliminating poorly targeted subsidies such as those for energy can
simultaneously reduce distributional impacts and contribute toward achieving climate-related
objectives.
Use timely, targeted, temporary support where essential, in a responsible way. For countries where negative
demand shocks are large, automatic stabilizers should play their role in dampening the shocks’
impact. Where large shocks and severe trade dislocations have a serious negative impact on
households, firms, or sectors, additional targeted and temporary support could be deployed.

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Such measures need to be appropriately designed to ensure proper targeting, include automatic
sunset clauses to avoid entrenched support that prevents adjustment and reallocation, and
mitigate fiscal and political economy risks. Responsibly adjusting the fiscal envelope to support
such new support, based on country-specific fiscal space consideration, is critical to ensuring
that public debt remains on a sustainable path.
Reinvigorating Medium-Term Growth
Potential growth remains subdued and cost-of-living pressures persist in the aftermath of the
pandemic. Lifting medium-term growth prospects is the only sustainable way to achieve a broad-
based increase in living standards and ease macroeconomic trade-offs. Higher growth would
support debt sustainability dynamics, thus increasing fiscal space in the medium term. Broad-
based structural reforms can contribute to raising growth potential, and multilateral cooperation
can support resilience in the wake of elevated uncertainty.
Enact structural reforms. Durable structural reforms across several areas, including labor markets,
education, regulation and competition, and financial sector policies, can jointly lift productivity
and potential growth and support job creation. In addition, technological progress, including
that related to digitalization and AI, can enhance productivity and potential growth.
Increasing female labor force participation can increase labor supply. Amid continued but
uneven population aging in both advanced economies and emerging market and developing
economies, policies to improve human capital and the labor outcomes of older workers,
including health policies and those pertaining to continued training and development, can
improve those workers’ labor market attachment and productivity (Chapter 2). A well-designed
mix of labor market interventions can also contribute to gradually raising the effective retirement
age. In addition to domestic labor market policies, evidence suggests that increased migration
flows can attenuate challenging demographic outlooks while mildly boosting growth (Chapter 3).
This requires facilitating the swift labor market integration of migrants (Caselli and others 2024)
and ensuring that skills are well matched with job opportunities (Beltran Saavedra and others
2024). Measures to attenuate the distributional impacts of labor market reforms, as well as
governance reforms, can further strengthen trust in public institutions (see Chapter 3 of the
October 2024 WEO). Robust regulatory frameworks coupled with investments in digital
infrastructure and a digitally competent workforce are critical to ensure gains from new
technologies are broadly shared across the workforce (Georgieva 2024).
Targeted deregulation can ease constraints hindering firms from stimulating entrepreneurship,
investment, and innovation, thus ultimately boosting medium-term growth potential. Estimates
suggest sizable distortions and real GDP costs averaging 0.8 percent of annual GDP for a set of
European countries (Pellegrino and Zheng 2024). Maintaining prudential regulations and
safeguarding financial stability remain key when reducing bureaucracy. Premature or
uncoordinated deregulation would increase financial stability risks and could fuel dangerous
boom-bust dynamics.
Labor market and regulatory reform should be complemented with policies to alleviate
financial constraints. Increasing financial accessibility and reducing financial barriers to efficient
capital allocation (see Chapter 3 of the April 2024 WEO) could further boost productivity

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 WORLD ECONOMIC OUTLOOK

growth. Removing internal trade barriers and advancing capital market reforms are critical for
business dynamism, notably that among innovation-intensive firms that lack tangible collateral
(see Note One of the October 2024 Regional Economic Outlook: Europe).
Although structural reforms have been well identified for several years, securing broad social
acceptability for such reforms has often been a significant obstacle. To increase the likelihood
structural reforms will succeed and to enhance the social acceptability of reform agendas,
participative processes are needed, coupled with efforts to strengthen public understanding of
reform proposals and continued stakeholder engagement throughout the reform process (see
Chapter 3 of the October 2024 World Economic Outlook; Chapter 2 of the April 2025 Fiscal
Monitor).
Make progress on climate policies. Addressing climate change requires a well-designed policy mix
that can generate macroeconomic benefits, including low-carbon, resilient growth. This includes
investments in renewable and energy-efficient technologies and economy-wide measures such as
carbon pricing, which can be complemented by fiscal incentives, technical assistance, and
financial support for adaptation projects in low-income countries. Many countries are
transitioning from fossil fuels to renewables, which can help improve energy security (Dolphin
and others 2024), benefit employment, and reduce balance of payments risks.

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Box 1.1. Risk Assessment Surrounding the Reference Forecast

This box presents two complementary assessments of Figure 1.1.1. Forecast Uncertainty around
Global Growth and Inflation Projections
risks to the global economy. First, it uses the IMF’s Group (Percent)
of Twenty (G20) model to derive confidence bands
WEO reference forecast
around the World Economic Outlook (WEO) reference
forecast. Second, based on the IMF’s Global Integrated 6
5
1. US GDP Growth

Monetary and Fiscal (GIMF) model, it simulates two 4

3
scenarios. Policies and shocks in scenario A result in a 2
widening in global imbalances and a fall in global output 1
0
relative to those in the reference forecast; policies in –1
scenario B result instead in a narrowing of global –2
–3
imbalances and an increase in global output relative to 2024 25 26 27 28 29 30

those in the reference forecast. 9 2. US Headline Inflation

8
Confidence Bands 7
6
The first assessment identifies the economic shocks 5
4
underlying historical data using the G20 model. It then 3
2
resamples these shocks and feeds them back through the 1
0
model to generate risk distributions (Andrle and Hunt –1
–2
2020). The procedure has been adjusted to align with the 2024 25 26 27 28 29 30

growth-at-risk assessment presented in the April 2025 6 3. Global GDP Growth

Global Financial Stability Report (GFSR). As in the previous 5
4
assessment in the October 2024 WEO, growth 3
distributions are skewed to the downside, and inflation 2
1
distributions are somewhat skewed to the upside.1 0
Panels 1 and 2 in Figure 1.1.1 show the distributions for –1
–2
US growth and headline inflation, respectively (90 percent 2024 25 26 27 28 29 30
confidence bands represented in the blue-shaded areas). 9 4. Global Headline Inflation
The probability of a recession occurring in 2025 is now 8
7
assessed at 37 percent, higher than in the October 2024 6
5
WEO.2 Risks have moved farther to the upside for US 4
inflation and policy rates (not shown), in part reflecting 3
2
the upward revision to projected inflation in the WEO 1
0
reference forecast. The risk that 2025 US headline –1
2024 25 26 27 28 29 30
inflation will rise above 3.5 percent is now more than 30
percent, compared with 13 percent back in October; the Source: IMF staff estimates.
Note: Each shade of blue represents a 5 percentage point
probability interval. WEO = World Economic Outlook.

The authors of this box are Michal Andrle, Jared Bebee, Domenico Giannone, Chris Jackson, Dirk Muir, Rafael Portillo, and Philippe
Wingender.
1 Aligning with the growth-at-risk assessment requires sampling some recession years more often: 1969, 1974–75, 1981, and to a lesser extent

2009 and 2020.

2 The recession risk for 2025 is defined as the probability that 2025 annual growth will be below 1.2 percent, consistent with a shallow

recession starting in the third quarter. The probability of a short-lived US recession in 2025, according to this criterion, was assessed to be about
25 percent at the time of the October 2024 World Economic Outlook (WEO).

International Monetary Fund | April 2025 33

 WORLD ECONOMIC OUTLOOK

probability that the average 2025 three-month Figure 1.1.2. Impact of Scenario A on GDP
Treasury bill rate will rise above 4.5 percent for 2025 is (Percent deviation from reference forecast)
about 33 percent (up from 27 percent in October). Global divergences
Add trade war
Panels 3 and 4 in Figure 1.1.1 show the distributions Add global uncertainty
for global growth and headline inflation. The Add tighter financial conditions

probability that global growth in 2025 will fall below 2 1.0 1. US

percent is assessed at close to 30 percent, higher than 0.5
the assessment done in October (17 percent). The 0.0
probability that global headline inflation will rise above –0.5
5 percent is estimated at about 31 percent, slightly –1.0
–1.5
lower than the corresponding estimate of 34 percent at
–2.0
the time of the October WEO.
–2.5
Scenarios 2024 26 28 30 Long
term
The GIMF model is next used to simulate two
1.0 2. Euro Area
scenarios. The version of the model used here has 10
0.5
regions, including China, the United States, and the 0.0
euro area. –0.5
The scenarios assume monetary policy responds –1.0
endogenously, with floating exchange rates in most –1.5
–2.0
regions. In scenario A, China’s currency is managed
–2.5
relative to the dollar through capital flow measures, 2024 26 28 30 Long
allowing some exchange rate adjustment in response to term
shocks but by less than what would be implied by a 1.0 3. China
fully floating regime; in scenario B, the renminbi 0.5
adjusts as in a flexible exchange rate regime. On the 0.0
fiscal side, automatic stabilizers are allowed to operate. –0.5
–1.0
Layers Considered in Scenario A
–1.5
Global divergences. The layer has three components: –2.0

• Renewal of the US Tax Cuts and Jobs Act (TCJA). –2.5

2024 26 28 30 Long
Scenario A assumes renewal of a broad set of term
provisions in the TCJA for a period of 10 years, 4. World
1.0
including individual and business taxes, the child 0.5
tax credit, and expensing of investment, totaling 0.0
about 11 percent of GDP over 2025–34. The –0.5
accompanying deficits are back-loaded, reaching –1.0
about 1.4 percent of GDP by 2027. Because the –1.5
renewal comes after a historical inflation surge, the –2.0
layer assumes a small additional temporary increase –2.5
2024 26 28 30 Long
in US inflation expectations. term

• Lower productivity in Europe. The recent slowdown in Source: IMF staff estimates.
productivity growth in the euro area deepens as a Note: “Long term” is at least 50 years ahead.

result of lower innovation, technological shifts, and

lack of access to equity funding. Total factor productivity growth declines by 0.2 percentage
point per year over five years, relative to that in the reference forecast, starting in 2025. The
decline is concentrated in the tradables sector.

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 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

• Weaker domestic demand in China. Consumption and Figure 1.1.3. Impact of Scenario B on GDP
investment fall relative to those in the reference forecast (Percent deviation from reference forecast)
by 0.7 and 0.5 percent, respectively, in 2025. The decline
US lower debt and tax reform
builds over 2026–27 and fades after that. Add EU public investment and defense
Add China productivity and sentiment
Trade war. The scenario assumes a ratcheting up of
tariffs in response to the April 2 announcement. First, it 2.0 1. US
incorporates an additional 50 percentage point increase in 1.5
tariffs on all China-US trade in both directions relative to
1.0
the reference forecast in this report. Second, countries other
than China respond tit for tat to the April 2 announcement, 0.5

raising tariffs on imports from the United States by the 0.0

same rate. Third, the United States responds by doubling –0.5
the rate announced on April 2 to all countries other than 2024 26 28 30 Long
term
China. As a result, there is an increase of about 18
percentage points in the effective tariff rate on both US 2.0 2. Euro Area
goods imports and US goods exports, relative to the current 1.5
reference forecast.
1.0
Increase in global uncertainty. Uncertainty over 0.5
macroeconomic policies increases. The resulting shock is
equivalent to a three-standard-deviation increase in the 0.0

global economic policy uncertainty measure in Davis –0.5

2024 26 28 30 Long
(2016), about 50 percent larger than the spike observed in term
2018–19. Regions more directly exposed to tariff measures,
2.5 3. China
or where trade represents a larger share of activity,
experience a somewhat greater uncertainty shock. 2.0
1.5
Tighter financial conditions. The combination of
1.0
shocks in the scenario triggers a tightening in financial
0.5
conditions. Asset prices decline globally in 2025, with the
0.0
largest decline in the US (about 5 percent on average for the
–0.5
year) and in emerging markets (about 3 percent). Sovereign 2024 26 28 30 Long
and corporate premiums in emerging markets excluding term
China increase by 50 basis points; corporate premiums in 2.0 4. World
advanced economies and China increase by 25 basis points.
1.5
The tightening in financial conditions lasts for two years.
1.0
Layers Considered in Scenario B
0.5
Lower US government debt. The United States embarks
on a series of fiscal reforms to reduce inefficiencies from 0.0
poorly targeted tax expenditures, shift from labor to –0.5
consumption taxes, and contain health care costs. In 2024 26 28 30 Long
term
addition, government consumption is permanently reduced.
These reforms, alongside savings from lower interest Source: IMF staff estimates.
Note: “Long term” is at least 50 years ahead. EU = European
payments, lead to a gradual decline of the overall fiscal Union.
deficit, which reaches 1 percent of GDP after five years.
The US public debt declines by 25 percentage points of GDP in the long term.
Higher public spending in Europe. Public investment increases in the euro area starting in
2025. It reaches 1 percent of GDP in additional spending by 2026, stays at that level until 2030,

International Monetary Fund | April 2025 35

 WORLD ECONOMIC OUTLOOK

and remains permanently higher by 0.4 percent after that to sustain a higher stock of public
capital.3 The latter raises total factor productivity and potential output permanently. The layer
also includes a permanent increase in defense spending of 0.3 percent of GDP, starting in 2025.
Over the WEO horizon, about two-thirds of the surge in spending is financed by higher deficits.
From 2030 onward, however, the increase in public capital and defense spending is offset by a
reallocation of existing spending, such that debt ratios gradually return to those in the reference
forecast.
Productivity gains and rebalancing in China. Structural reforms that reduce barriers to
entry and reforms to state-owned enterprises lead to increased market dynamism, and
strengthening of the social safety net leads to demand-side rebalancing. Productivity in the
tradables and nontradables sectors increases by about 2 and 0.5 percent, respectively, through
2030, boosting sentiment in the short run. The saving rate decreases by 2 percentage points of
GDP over the same period.
Impact on World Economy Figure 1.1.4. Impact of Scenarios A and B on
Current Account in Percent of GDP
Figures 1.1.2 and 1.1.3 present the effects, for scenarios (Percentage point deviation from reference forecast;
A and B, on the level of GDP during 2024–30 and in the solid = Scenario A, dashed = Scenario B)
long term, for China, the United States, the euro area, 1.5
and the world. Effects are presented as percent US Euro area China
1.0
deviations from the reference forecast. Figure 1.1.4
4

shows the total effects of the scenarios on the current 0.5

account balances of these three main regions as
0.0
deviations from the reference forecast in percentage
points of GDP. –0.5

In scenario A, the global divergences layer is somewhat –1.0

stimulative for the US economy as a result of the TCJA
–1.5
renewal. The impact is limited initially but builds over
time. Over 2025–26, the layer adds 20–30 basis points to –2.0
2024 25 26 27 28 29 30
US headline inflation and 30 basis points to the US
policy rate and results in a modest appreciation of the Source: IMF staff estimates.
Note: Scenario A includes global divergences, trade war,
dollar. Lower productivity in Europe reduces euro area increases in global uncertainty, and tighter financial
activity gradually. The component lowers GDP by about conditions. Scenario B includes lower debt and tax reform in
the US, higher public spending in the European Union, and
0.3 and 0.5 percent in 2025 and 2026. As demand falls in productivity gains and rebalancing in China.
lockstep with potential, the impact on the region’s
inflation and policy rates is close to zero. Lower domestic demand in China subtracts 0.3 and 0.5
percent from China’s reference forecast GDP in 2025 and 2026, respectively, with the decreases
reflecting mainly lower consumption. The component reduces China’s headline inflation by an
additional 20–30 basis points in 2025–26, with the effects amplified by limited adjustment of the
renminbi-to-dollar exchange rate.
The trade war layer reduces global demand, especially for US and Chinese goods. Differences in
US tariff rates across countries create scope for trade diversion, and some regions benefit slightly

3 The scenario is similar to the scenario considered in the October WEO, but the increase in public investment is smaller and the financing

assumption is somewhat different. The October scenario was implemented using a different model, the G20 model, leading to some differences
in multipliers and spillovers.
4 The impact on growth rates is approximated by subtracting the effect on output from the previous year.

36 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

in the short run, for example, the euro area. The effect is short-lived: As relative prices and
sectoral demand adjust, the impact on activity becomes uniformly negative across countries. The
effect builds over time as tariffs weigh on capital accumulation. Tariffs reduce world GDP by 0.6
percent by 2027 and by 1 percent in the long term. There is a small increase in global inflation of
about 10 basis points in 2025–26, as the direct effect from higher tariffs is offset by the
disinflationary effect from reduced activity.5 Inflation falls below the reference forecast after
that, including inflation in the United States.
The increase in global uncertainty layer reduces global investment by close to 2 percent in 2025 and
3 percent in 2026, relative to the reference forecast. Global consumption also decreases over
2025–27. The overall impact on global output from this layer is closer to –0.5 percent of that in
reference forecast in 2025 and –0.8 percent in 2026. The layer contributes a moderate decrease
in global inflation and policy rates of close to 20 basis points by 2026. The tighter financial
conditions layer subtracts 0.5 percent from global GDP in 2025, with all regions being affected,
from both the domestic tightening and international spillovers.
The combined effect of the layers in scenario A is a decrease in global GDP of about 1.3
percent by 2025 and 1.9 percent by 2026, relative to the reference forecast. All regions see a
sizable decline in activity over the WEO horizon and in the long term, with the long-term
impact reflecting tariff distortions and lower productivity. The decrease in global activity is
disinflationary, with global headline inflation and policy rates falling by close to 40 basis points
by 2027. Inflation and policy rates are initially flat in the United States but fall below those in the
reference forecast after 2026. The current account balance decreases in the United States (the
deficit worsens relative to the reference forecast) and increases in China and the rest of the
world.
In scenario B, the lower US government debt layer reduces US debt by 25 percent of GDP over the
long term, increasing fiscal sustainability. US fiscal reforms have a positive short-run effect on
US activity, with GDP increasing by 0.2 percent in 2025–26. Inflation net of tax effects is
slightly higher than that in the reference forecast, as are policy rates. The reduction in US public
debt leads to a gradual decline in US and global real interest rates, which decrease by 10 basis
points in the long run. Beyond the WEO horizon, the long-run effect is positive for both US
and world GDP, by 0.4 and 0.2 percent relative to the reference forecast, respectively. The
United States also experiences an increase in its current account balance (lower deficits than in
the reference forecast).
The higher public spending in Europe layer provides a sizable boost to the euro area, raising GDP
by up to 1.3 percent by 2026, relative to that in the reference forecast. Inflation increases by
more than 20 basis points over the WEO horizon, with the euro area policy rate increasing by
about 50 basis points. The current account balance decreases (lower surplus than in the
reference forecast). The buildup in public capital raises productivity and potential output in the
euro area permanently. Spillovers to other regions are positive but small.
The productivity gains and rebalancing in China layer raises that country’s GDP by about 1 percent
by 2026, relative to that in the reference forecast; about one-third of the increase is the result of
improved sentiment. The reduction in the saving rate adds to domestic demand, and potential
output increases gradually to 2 percent above the current reference forecast, with a positive net

5 The effect of tariffs on inflation is uncertain, as explained in Box 1.2. The effect depends on responses of exchange rates, wages, and firms’

markups.

International Monetary Fund | April 2025 37

 WORLD ECONOMIC OUTLOOK

effect on inflation that reaches about 20 basis points by 2030. China’s current account decreases
considerably (lower surplus relative to that in the reference forecast).
Finally, the combined effect of the layers in scenario B is an increase in global output of about
0.4 percent by 2026 (0.8 percent in the long term) and an increase in global inflation of about 15
basis points.

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Box 1.2. The Global Effects of Recent Trade Policy Actions:

Insights from Multiple Models
This box analyzes the macroeconomic implications of recent tariff announcements included in
the World Economic Outlook (WEO) reference forecast and provides a range of possible outcomes
regarding their macroeconomic impact. The effects of tariffs are complex, operating through
different channels that may not be sufficiently captured by a single model. The analysis here
draws on three models: the IMF’s Global Integrated Monetary and Fiscal (GIMF) model and
two trade models based on Caliendo and Parro (2015; hereafter “CP”) and Caliendo, Feenstra,
Romalis, and Taylor (2023; hereafter “CFRT”).1 The impacts on global activity are negative and
larger for countries experiencing higher tariff increases or more directly exposed. The effects on
inflation, and to some extent exchange rates, are uncertain and depend on various factors. This
assessment for activity should be considered a lower bound. The impact on inflation could also
be greater than expected. Notably, further escalation of trade measures beyond those discussed
in this box and prolonged uncertainty about future tariffs amplify the negative macroeconomic
effects but are not considered here.2
Tariff Announcements Included in the Model-Based Assessment
The box considers the set of tariff measures that were implemented between February 1 and
April 4, 2025. These include unilateral tariff increases by the United States. Some are country
and region specific, such as the April 2 tariffs levied in proportion to partners’ bilateral trade
surpluses, with a minimum rate increase of 10 percent. Other tariff increases are on specific
goods and commodities, such as steel and aluminum and auto and auto parts. The combined
measures increase the effective overall tariff rate in the United States by about 25 percentage
points, ranging from an average increase of about 15 percentage points for Canada, the euro
area, and Mexico to 27 percentage points for an aggregate of Asian countries excluding China
and more than 50 percentage points for China.
Tariff responses by US trading partners are also included here. Canada places a 25 percent
tariff on 40 percent of imports of US goods. It is also assumed to respond with one-to-one
tariffs on imports of US autos. In response to the April 2 tariffs, China increases tariffs on all US
imports by 34 percentage points, in addition to earlier targeted measures aimed at some energy,
transport, and agricultural goods. Overall, the countermeasures amount to an effective tariff rate
increase of about 5 percentage points on total US goods exports.
The models. GIMF is a global dynamic model featuring capital accumulation, numerous
rigidities, three sectors, and global value chains. The version of GIMF employed here has eight
countries. CP and CFRT are static models with rich country and sectoral structures (160
countries and 12 sectors in the specification of CP used here, 60 and 17, respectively, in this
specification of CFRT) and detailed input-output linkages. CP assumes constant returns to scale,
whereas CFRT features heterogeneous firms with increasing returns to scale determining
whether to produce and export.

1Theauthors of this box are Diego Cerdeiro, Rui Mano, Dirk Muir, Rafael Portillo, Diego Rodriguez, Lorenzo Rotunno, Michele Ruta, Elizabeth
Van Heuvelen, and Philippe Wingender.
1A similar comparison was featured in Box 4.4 of the April 2019 World Economic Outlook, at the time of previous tariff hikes by China and the

United States.
2 Box 1.1 analyzes the role of heightened policy uncertainty.

International Monetary Fund | April 2025 39

 WORLD ECONOMIC OUTLOOK

Short-Term Effects
Figure 1.2.1. Short-Run Effects of Tariffs
GIMF is used to assess the short-term dynamics (one (Percent deviation from a forecast with no tariffs)
to three years). All tariffs
Temporary tariffs, higher pass-through
Assumptions. Endogenous monetary policy responses Dollar invoicing for GVCs
are assumed, with fully floating exchange rates in
2.0 1. Bilateral US-Dollar Exchange Rate
Canada, the euro area, Mexico, the United States, and
other regions. The yuan-to-dollar exchange rate is 0.0

assumed to be managed through capital flow measures, –2.0

which allows some exchange rate adjustment in China –4.0
but by less than what would be implied by a fully floating
–6.0
regime. Tariff revenues are used to reduce debt over the
first 30 years; in the long term they are rebated to –8.0

households. –10.0
Along with the standard specification of GIMF, the CHN CMX Euro area Other Asia

short-term analysis considers two additional 0.6 2. Headline Consumer Price Inflation
specifications (“versions”) that vary along the following 0.4
dimensions: 0.2
• US Dollar invoicing of global trade. In the first 0.0
specification, exporters charge for their wares in
–0.2
local currency. An alternative version assumes
–0.4
instead that about half of global trade is
–0.6
denominated in dollars. This assumption leads to
inflationary pressures in other countries when the –0.8
USA CHN CMX Euro area Other Asia
US dollar appreciates.
• US inflation. The initial assumption is that tariffs are 0.5 3. Real Gross Domestic Product

perceived as permanent (resulting in a large 0.0

appreciation of the dollar) and that US firms partly
absorb the resulting increase in import costs –0.5

through lower margins. In this alternative version, –1.0

tariffs are expected to be removed after several
years (limiting dollar appreciation), and US firms –1.5

are assumed to fully pass higher import costs –2.0

through to consumers. Both assumptions cause the World USA CHN CMX Euro Other
area Asia
tariff increases to result in higher inflationary
pressures in the US. Source: IMF staff estimates.
Note: The figure shows results from tariff simulations using
the IMF’s Global Integrated Monetary and Fiscal (GIMF)
Figure 1.2.1 shows the impact across the three versions model for the first three years by country. The blue lines show
the effects of tariffs under standard assumptions. The red
of GIMF (the standard specification plus the two lines show the effects of temporary tariffs and higher pass-
alternative versions) for bilateral real exchange rates with through. The yellow lines show the effects when about 50
percent of global trade is invoiced in US dollars. Data labels in
respect to the US, for inflation, and for GDP. Results the figure use International Organization for Standardization
are shown in deviations from a no-tariff baseline for the (ISO) country codes. “Other Asia” includes BGD, BRN, IDN,
IND, KHM, LAO, MMR, MYS, PHL, SGP, THA, and VNM.
world, the United States, China, Canada and Mexico CMX = Canada and Mexico; GVCs = global value chains.
combined (CMX in the figure), the euro area, and other
Asian countries.
Currencies. Higher tariffs lead to a depreciation of currencies with respect to the dollar (Figure
1.2.1, panel 1). The euro area and Other Asia experience the largest depreciations. The yuan

40 International Monetary Fund | April 2025

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

depreciates by less relative to others on account of the exchange rate management assumption.
Exchange rate movements are considerably smaller if tariff increases are perceived as temporary,
about one-third the size relative to the version of the model in which tariffs are perceived as
permanent.
Inflation. The impact on inflation is uncertain (Figure 1.2.1, panel 2). In the first version, the
effect is limited, except in China, which experiences a decrease of about 60 basis points in 2026
because of the managed exchange rate. Inflationary effects in the United States are offset by the
appreciation of the dollar and some decline in markups. When tariffs are perceived to be
temporary and import costs are fully passed on, US inflation increases by close to 50 basis points
in 2025. The impact on inflation outside the United States is instead larger if the dollar plays a
central role in the pricing of global trade, as the appreciation of the dollar raises production costs
globally.
Activity. Tariffs have a large negative impact on global activity. The effect is largest for Canada
and Mexico, China, and the United States (Figure 1.2.1, panel 3). The impact on China also
reflects a less-than-full adjustment of the exchange rate. The negative impact on the United
States is amplified in the version of GIMF in which tariffs are perceived to be temporary and
import costs are fully passed on, because the resulting increase in inflation leads to a tightening
of monetary policy. The euro area and Other Asia benefit slightly in the short run from trade
diversion, but the effect depends on the currency used for invoicing global trade. Under dollar
invoicing, the appreciation of the dollar weighs on global external demand, and other regions
experience large losses as well. The world economy sees a negative hit to activity that ranges
between 0.4 and 1 percent of world GDP by 2027.
Medium- to Long-Term Effects
All three models (GIMF, CP, and CFRT) are used to assess medium- to long-term impact (10
years), under the assumption that tariffs are permanent.
Channels. The first trade model (CP) emphasizes losses because tariffs move resources
inefficiently across sectors. Losses in the second model (CFRT) tend to be larger because tariffs
reduce access to foreign markets by the most productive firms, while leading to entry of less
productive firms domestically. The third model (GIMF) emphasizes lower levels of capital
accumulation from tariff-related distortions. In all models, tariffs imposed by large countries can
create favorable terms-of-trade effects. Finally, results depend crucially on the ease with which
importers can substitute Table 1.2.1. Long-Run Effects of Tariffs
across different exporters (Percent deviation from a forecast with no tariffs)

(trade elasticities) and across 1. Real Exports 2. Real GDP

Trade Models Trade Models
foreign and domestic GIMF
CP CFRT
GIMF
CP CFRT
producers (macro United States -19.3 -21.8 -27.6 -1.3 -0.3 -0.9
China -5.4 -4.9 -6.7 -1.1 -0.5 -0.7
elasticities). Elasticities are Canada and Mexico -5.7 -1.8 -6.0 -1.9 -0.5 -0.7
greater in the two trade Euro Area -1.1 0.0 -0.5 -0.6 0.0 -0.2
models than in GIMF. Other Asia
World
-1.6
-5.1
-0.1
-3.1
-0.3
-4.2
-1.0
-0.9
0.0
-0.2
0.3
-0.4

Trade. Tariffs permanently Sources: Caliendo and Parro (CP) 2015; Caliendo, Feenstra, Romalis, and Taylor (CFRT) 2023; and IMF staff estimates.
Note: The table shows the percent deviation from a forecast with no tariffs. “Other Asia” includes Bangladesh, Brunei Darussalam,
reduce global trade and Cambodia, India, Indonesia, the Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and
Vietnam. GIMF = IMF’s Global Integrated Monetary and Fiscal model.
reallocate flows across
countries (Table 1.2.1, panel 1). Canada, Mexico, China, and especially the United States see the
largest declines in exports, in the latter country due in large part to the long-term real
appreciation of the US dollar. Although China sees the largest tariff increase, the decline in

International Monetary Fund | April 2025 41

 WORLD ECONOMIC OUTLOOK

China’s exports is mitigated by export diversion to other markets. Magnitudes are broadly similar
across GIMF and the two trade models, despite each model emphasizing different channels.
Output. Tariffs generate global long-term output losses across all models (Table 1.2.1, panel 2).
Canada and Mexico, China, and the United States are the most affected. The negative impact on
the US is similar across GIMF (which captures well changes in the capital stock) and CFRT
(which captures productivity losses due to misallocation). In GIMF, lower levels of capital
accumulation weaken potential output; in CFRT, a reduction in market access prompts some
firms to stop exporting, and less productive firms enter in import-competing sectors. The effect
on the United States is smallest in CP, as relative to CFRT it does not account for productivity
losses due to productive firms exiting. The impact on other regions varies across models, with
GIMF showing large negative effects for the euro area and Other Asia, while trade models show
relatively small effects for those regions. This is because of greater trade reallocation in the latter
models, reflecting the larger elasticities of substitution, which create scope for countries less
directly exposed, or facing smaller tariffs, to benefit from the reconfiguration of global trade. In
GIMF, all countries are instead affected by tariff-induced distortions along global supply chains,
which also explains why the negative impact on global output is greater. More generally, the
combined effects from lower capital accumulation (captured by GIMF), sectoral misallocation
(captured by the trade models), and prolonged trade policy uncertainty (not included in the
simulations) would compound the losses for each region and could well offset any positive
impact from trade reallocation.

42 International Monetary Fund | April 2025

 WORLD ECONOMIC OUTLOOK

Commodity Special Feature: Market Developments and the

Impact of AI on Energy Demand

Primary commodity prices increased 1.9 Figure 1.SF.1. Commodity Market Developments
percent between August 2024 and March 400 1. Commodity Prices
2025, with the rise driven by natural gas, (Index, 2016 = 100, US CPI adjusted)

precious metals, and beverage prices. In oil 300 All commodities

Base metals
markets, prices fell amid concerns that a trade Food
war could dampen global demand, adding to 200 Energy
downward pressure from robust oil production
100
growth outside OPEC+ (Organization of the
Petroleum Exporting Countries plus selected 0
nonmember countries, including Russia) and 2015 16 17 18 19 20 21 22 23 24 25 26
the unwinding of OPEC+ supply cuts. With 90 2. Brent Crude Oil Price Forecasts
the notable exception of gold prices, which (US dollars per barrel; expiration dates on x-axis)
85
continued to soar owing to geopolitical October 2023 WEO
April 2024 WEO
uncertainty, and prices of some staples like 80
October 2024 WEO
wheat, most commodity prices have dropped 75 April 2025 WEO
since the announcement of additional tariffs by 70
the US administration on April 2. This
65
Special Feature also analyzes the impact of
60
artificial intelligence (AI) on energy demand.1 20 24 25 26 27 28 29 30

Commodity Market Sources: Bloomberg, L.P.; Haver Analytics; IMF, Primary Commodity Price System;
International Energy Agency; and IMF staff calculations.
Developments Note: In panel 1, latest actual CPI value is applied to forecasts, represented by the
dashed portions of the graph lines. CPI = consumer price index; WEO = World
Oil prices declined 9.7 percent between Economic Outlook.
August 2024 and March 2025 as trade war
fears, strong non-OPEC+ supply growth, and the unwinding of OPEC+ cuts more than offset lingering supply
risks. Oil prices then plummeted in early April amid escalating trade tensions, adding to an
already-bearish outlook. This latest catalyst compounded weak fundamentals, with supply
growth expected to likely outpace tepid global demand growth through 2025 and 2026. Demand
concerns were exacerbated by sluggish Chinese demand, partly dented by the rising penetration
of electric vehicles (EVs).
In this context, OPEC+ policy will be pivotal: Facing pressure to roll back its deep and
sustained cuts, OPEC+ has decided to start gradually unwinding them despite a broader
environment of falling prices. The harshest sanctions on Russia to date (imposed on January 10,
2025) have not materially disrupted oil flows. Russian oil, exported primarily to China and India,

The contributors to this Special Feature are Christian Bogmans, Patricia Gomez-Gonzalez, Giovanni Melina (team co-lead), Jorge Miranda-
Pinto, Andrea Paloschi, Andrea Pescatori (team lead), and Sneha Thube, with research assistance from Ganchimeg Ganpurev, Maximiliano Jerez
Osses, and Joseph Moussa. This Special Feature is based on Bogmans and others (2025).

International Monetary Fund | April 2025 43

CO M MO DI T Y S P EC IA L F EA TU R E: M AR K ET D E V EL O PM E NT S A N D T H E IM P A CT
O F AI O N EN E RG Y D E M AN D

has traded at a $5–$15 discount to Brent. Futures markets indicate that oil prices will average
$66.9 per barrel in 2025, a 15.5 percent decline, before falling to $62.4 in 2026 (Figure 1.SF.1,
panel 2). Risks to this outlook are balanced. Upside price risks from potential disruptions in oil
supply from countries subject to sanctions or a de-escalation of trade barriers are offset by the
possibility of a further escalation in the trade war and additional increases in OPEC+’s
production schedule.
Natural gas prices reversed course in the first week of April, beginning to decline alongside oil prices after a
six-month period of gains. Title Transfer Facility (TTF) trading hub prices in Europe rose 7.7
percent between August 2024 and March 2025 to $13.1 a million British thermal units (MMBtu).
This was above the historical average but well below the 2022 peak. Among other factors, a cold
snap and various supply disruptions, including a halt of Russian gas to Europe through Ukraine
at the beginning of January 2025, explained the upward trend. Similarly, harsh weather and a
surge in demand for gas exports led to a doubling in Henry Hub prices. Weak demand from
China, in contrast, kept Asian liquefied natural gas prices almost constant over the same period.
Following the April 2 tariff announcement, gas prices reversed course, with concerns about
future energy demand pushing gas prices down across the board. As of April 4, futures markets
suggested that TTF prices will average $12.5 a MMBtu in 2025, steadily decreasing to $7.8 a
MMBtu in 2030. Henry Hub prices are expected to decline from $4.0 a MMBtu in 2025 to $3.3 a
MMBtu in 2030. Risks to this outlook are balanced.
Metals prices rose amid safe-haven demand and supply disruptions until the end of March, but things
changed abruptly on April 2. The IMF’s metals price index increased by 11.2 percent between
August 2024 and March 2025 (Figure 1.SF.1, panel 1), with the rise driven mainly by gold,
aluminum, and copper prices. Among base metals, aluminum (12.7 percent) and copper prices
(8.4 percent) increased the most because of supply concerns. Both metals also faced demand
pressures from front-loading ahead of tariffs. Like those for energy, industrial metals prices
dropped abruptly in the first week of April as trade tensions escalated. Futures markets now
predict a downturn in prices for base metals, with price declines of 5.7, 4.5 and 14.3 percent for
aluminum, copper, and iron ore, respectively, by the end of 2026. This stands in contrast to what
has taken place regarding prices for precious metals: Gold prices have repeatedly set new records
amid policy and geopolitical uncertainty, recently surpassing their historical high at $3,000 a ton.
Agricultural commodity prices increased as a result of adverse weather. Between August 2024 and March
2025, the IMF’s food and beverages price index increased by 3.6 percent, with the rise driven by
higher beverage prices. Cereal prices increased modestly, by 0.6 percent, as concerns over crop
conditions for wheat and corn subsided. Coffee prices jumped 33.8 percent, with the IMF coffee
index reaching historic highs in February because of weather-related supply concerns in Brazil.
Meanwhile, rice prices fell 26.0 percent as crop conditions improved in India and other parts of
Asia. New trade barriers imposed in April had heterogeneous effects on agricultural prices. The
price of income-elastic (coffee) and trade-sensitive (soybeans) crops have declined sharply,
whereas prices for staples like corn and wheat are so far less affected. Upside risks stem from
trade disruptions and adverse weather; larger-than-expected harvests, trade war intensification,
and broader uncertainty are the main downside risks.

44 International Monetary Fund | April 2025

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Power Hungry: How AI Will Drive Energy Demand

The rapid development and adoption of
generative AI models, including large language
models, require building more data centers that
consume vast amounts of electricity. Large
language models’ costs have two main
components: a large fixed cost for training the
models and variable costs for operating and
responding to user prompts.2 Because substantial
computational resources are required during both
stages, electricity consumption represents a
critical input for companies delivering AI
services. In northern Virginia, which features the
largest concentration of data centers in the world,
the square footage of server-filled warehouses is
now roughly equivalent to the floor space of eight
Empire State Buildings (Cushman & Wakefield
2024).
Using a multicountry computable general
equilibrium (CGE) model, IMF-ENV (Chateau
and others 2025), this Special Feature seeks to
answer the following questions: (1) How fast have
sectors involved in the development and delivery
of AI-related services grown in recent years, and
what has happened to their electricity
consumption? (2) How does the projected electricity demand from AI by 2030 compare with
other drivers of demand, such as EVs? (3) What is the impact on energy prices and the mix of
electricity sources under alternative policy scenarios? (4) What will be the impact of data centers’
growth on carbon emissions?
The Growing Macroeconomic Relevance of AI-Producing Sectors
In the US, AI-producing sectors’ value added quadrupled from $278 billion (in constant 2017
dollars) to $1.13 trillion between 2010 and 2023, a rate much faster than those for private
nonfarm and manufacturing value added. As a result, these sectors’ share in total US GDP
increased from 2.4 percent in 2013 to 3.5 percent in 2023, with the data-processing sector nearly
doubling its share in the same period. Meanwhile, the share of manufacturing declined by 1.5
percentage points (Figure 1.SF.2, panel 1). This fast growth of AI-producing sectors was driven
by remarkable gains in labor productivity, with value added per employee in the data-processing
sector growing about four times faster than that in the whole economy over the past 10 years

2 Large fixed costs create economies of scale that concentrate AI development among a few large players (Korinek and Vipra 2024), although

this pool has expanded recently as more variation in the cost structure of large language models has emerged.

International Monetary Fund | April 2025 45

CO M MO DI T Y S P EC IA L F EA TU R E: M AR K ET D E V EL O PM E NT S A N D T H E IM P A CT
O F AI O N EN E RG Y D E M AN D

(see Online Annex Figure 1.1.2, panel 1 in Online Annex 1.1).3 This productivity growth was
largely the result of elevated investment in physical capital and the complementarity of
intermediate inputs, contrary to what was the case in computer systems design, in which labor
and total factor productivity (TFP) contributed significantly to output growth (Figure 1.SF.2,
panel 2). Hence, the high output per employee in data centers, compared with that in other
sectors, is the result of rapid capital accumulation, which has increased energy consumption as
an intermediate input.
AI’s Demand for Electricity
Electricity costs make up 13–15 percent Figure 1.SF.3. AI’s Demand for Electricity
(Thousands of terawatt-hours; electricity demand for data centers
of total costs for data center companies, compared with that in top electricity-consuming countries in 2023)
whereas they account for only 0.8–1.5
10
percent for semiconductor firms and AI
service companies. However, the latter
8
have almost doubled the share of
electricity costs in their total costs in less 6
than five years (see Online Annex Figure
1.1.3 in Online Annex 1.1). As these 4
companies integrate vertically by
building, operating, and leasing their own 2
data centers, that share will likely
continue to grow. 0
CHN

USA

IND

RUS

BRA

CAN
JPN

FRA
DCs (2030e)

EVs (2030e)

KOR

GER

DCs (2023e)
The broader implications for global
electricity consumption are substantial.
Worldwide electricity consumption from Sources: International Energy Agency (IEA); Organization of the Petroleum
data centers and AI is estimated to have Exporting Countries (OPEC); and IMF staff calculations.
Note: Estimates for data centers (DCs) and electric vehicles (EVs) are for the
reached 400–500 terawatt-hours (TWh) world and come from OPEC and the IEA, respectively. Data labels in the figure
use International Organization for Standardization (ISO) country codes. e = estimate.
in 2023, more than double the level in
2015 (OPEC 2024). For the United States, where growth is the fastest, electricity demand from
data centers is expected to increase from 178 TWh in 2024 to 606 TWh in 2030 under a
medium-demand scenario (McKinsey & Company 2024a). By 2030, AI-driven global electricity
consumption could hit 1,500 TWh, conceivably making its level comparable to that of India’s
current total electricity consumption, the third highest in the world. This projected electricity
demand from AI by 2030 is about 1.5 times higher than expected demand from EVs, another
emerging source of electricity demand (Figure 1.SF.3).
Recent developments in the AI industry have increased uncertainty about its future compute
and energy demands. Companies such as DeepSeek are achieving breakthroughs in algorithmic
efficiency that may lower the computational costs of AI models faster than previously
anticipated. However, these efficiency gains may be counterbalanced by greater use of compute
by companies pursuing better-performing models (Hoffmann and others 2022). Adding to this

3 All online annexes are available at www.imf.org/en/Publications/WEO.

46 International Monetary Fund | April 2025

 WORLD ECONOMIC OUTLOOK

complexity is the recent emergence of reasoning models—which require more compute in their
deployment—and possibly greater AI use driven by lower costs and availability of open-source
models.
The Effects of Increased Demand for Electricity
In the IMF-ENV model, the impact of AI is captured by an increase in information technology
(IT) sectors’ TFP in China, the United States, and Europe to match the expected increase in data
center power demand between 2025 and 2030 (see Online Annex Table 1.1.1. in Online Annex
1.1). This growth is projected at constant annual rates of 22, 13, and 10 percent, respectively (JP
Morgan 2024; McKinsey & Company 2024a, 2024b).
Three scenarios are simulated here: (1) a baseline scenario, which excludes the AI-related TFP
shock but reflects energy and emissions projections consistent with policies introduced through
2024; (2) an AI scenario under current energy policies, which models the AI-related TFP shock,
assuming that the composition of electricity generation remains identical to that in the baseline
scenario; and (3) an AI scenario under alternative energy policies, under which the share of renewables
in total electricity generation is aligned with regions’ long-term strategies using feed-in tariffs for
renewables, though in practice policy choices will be guided by countries’ preferences.4 Results
for both AI scenarios are reported as deviations from the baseline scenario, unless stated
otherwise.
The AI shock increases electricity consumption by the IT sector, and power producers are
expected to expand generation. The composition of electricity generation by technologies varies
across countries and is based on their relative production costs and current policies. By 2030, in
the AI scenario under current energy policies, total electricity supply increases by 8 percent in the
United States (525 TWh), 3 percent in Europe (145 TWh), and 2 percent in China (237 TWh)
relative to the baseline scenario. In the AI scenario under alternative energy policies, the increase in
total electricity supply is kept the same, but its composition shifts in favor of renewables. In
China, the United States, and Europe, generation from solar and wind sources offsets about 166
TWh, 58 TWh, and 35 TWh of generation, respectively, from other sources, including largely
coal power in China and natural gas in the US (Figure 1.SF.4, panel 1).

4 AI expansion relies on electricity growth, so countries’ energy policies should focus on supply. Different supply-side policies affect prices,

GDP, and revenue (Chateau, Jaumotte, and Schwerhoff 2024). Feed-in tariffs for solar photovoltaic (PV) and wind are simulated owing to their
historical inclusion in policy packages and because these renewables are cost competitive with fossil fuels in these regions (IRENA 2024).

International Monetary Fund | April 2025 47

CO M MO DI T Y S P EC IA L F EA TU R E: M AR K ET D E V EL O PM E NT S A N D T H E IM P A CT
O F AI O N EN E RG Y D E M AN D

In both scenarios, the rising marginal Figure 1.SF.4. The Effects of Increased Demand for Electricity
costs of electricity supply mean that the 300 1. Electricity Supply and Generation Mix, 2030 1,000
increase in generation is less than (TWh; change in generation mix under alternative energy 800
200 policies relative to that under current policies) 600
proportional to economy-wide demand Others
400
100 Oil
growth, which drives electricity prices up. Nuclear
200
0 0
At the same time, strong commitment of Natural gas
–200
Coal
major AI players to resolving medium- –100
Hydropower –400
5
term power supply rigidities could lead to –200 Solar and wind –600
Change in total electricity supply (right scale) –800
a smaller increase in electricity prices. In –300 –1,000
China United States Europe
this case, the surge would be 0.9 percent
in the United States, 0.45 percent in 16 2. Change in Electricity Prices, 2030
(Percent; change relative to that in baseline scenario)
Europe, and 0.35 percent in China under 14
Current policies with no additional investments in transmission and distribution
12
current energy policies (Figure 1.SF.4, Current policies with smaller renewables scale-up
Current policies
10
panel 2). However, material pressure on 8
Alternative policies with no additional investments in transmission and distribution
Alternative policies with smaller renewables scale-up
prices would be added if the renewables 6
Alternative policies

scale-up slows from recent trends and if 4

further investments are not made in 2
transmission and distribution capacities 0
China Europe United
States
(relative to those in the baseline). The price
increase in the AI scenario under current Sources: IMF, IMF-ENV model; and IMF staff calculations.
Note: In panel 1, the left axis shows the change in generation mix under alternative
energy policies could escalate up to 5.3 energy policies relative to current policies in terawatt-hours (TWh). Feed-in tariffs
percent in China, 8.6 percent in the increase generation from solar and wind sources. The right axis shows the total
increase in electricity supply relative to the baseline scenario in TWh, which is
United States, and 3.6 percent in Europe identical under both current energy policies and alternative energy policies.

by 2030 (Figure 1.SF.4, panel 2), adding to price pressures coming from many other sources.6
In addition, without further investments in transmission and distribution, support for the
expansion of the AI sector would require redirecting electricity from other economic activities.
Such a shift would pose significant challenges, especially for energy-intensive manufacturing
sectors. In the United States, for example, annual growth in the value added of these sectors
would fall by an average of 0.3 percentage point compared with that in the baseline scenario,
reducing annual GDP growth by 0.1 percentage point. The electricity price increase is more
muted in the AI scenario under alternative energy policies owing to feed-in tariffs on solar and wind.
The tariffs reduce the generation price of these technologies, which have relatively low
production costs and a higher share in total electricity generation compared with those in the AI
scenario under current energy policies.

5 Public investments are being made in the United States for upgrading transmission and distribution infrastructure to meet rising electricity

demand. Innovative solutions like power coupling (Engel, Posner, and Varadarajan 2025) and small modular nuclear reactors could offer
flexibility, making constraints less restrictive than expected. Most new nuclear capacity in the United States is expected online no earlier than the
early 2030s.
6 Chandramowli and others (2024) estimate a 19 percent rise in US wholesale electricity prices from 2025 to 2028 because of increased demand

driven not only by data centers, but also by electrification of buildings and transportation, battery and fuel cell manufacturing, AI, and
cryptocurrency mining.

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In both AI scenarios, global and Figure 1.SF.5. Emission Impacts of Expansion in IT Sector
(MtCO2e; cumulative greenhouse gas emissions; Percent change
regional greenhouse gas (GHG) relative to that in baseline, right scale)
emissions increase because of the
increased energy demand resulting from 2.0 US
Rest of the world
1.4

the expanded IT sector and its Europe 1.2

1.6 China
spillovers to the economy. In the AI World (right scale) 1.0
scenario under current energy policies, the
1.2
2030 increase is 5.5, 3.7, and 1.2 percent 0.8

in the US, Europe, and China, 0.6

0.8
respectively, with a global average
0.4
increase of 1.2 percent (Figure 1.SF.5).
0.4
In cumulative terms, this translates into 0.2
a global GHG emissions increase of 1.7
0.0 0.0
gigatons (Gt) between 2025 and 2030, Current Alternative
policies policies
which is similar to Italy’s energy-related
GHG emissions over a five-year period. Sources: IMF, IMF-ENV model; and IMF staff calculations.
Note: The left axis shows the total greenhouse gas emissions increase in metric
Notably, in the AI scenario under tons of carbon dioxide equivalent (MtCO2e) between 2025 and 2030 resulting from
information technology (IT) sector expansion in selected regions. The right axis
alternative energy policies, even a modest shows the total increase in global emissions in 2030 relative to the baseline
decarbonization of the power sector emissions as a result of this expansion.
limits the total cumulative global GHG emissions increase to 1.3 Gt by 2030, which is 24
percent less than in the AI scenario under current energy policies.7
In the AI scenario under current energy policies, the AI shock raises the average annual growth rate
of global GDP by 0.5 percentage point between 2025 and 2030, in line with previous IMF
estimates ranging between 0.1 percentage point and 0.8 percentage point (April 2024 World
Economic Outlook). The impact is greater in countries where the projected growth rate of the IT
sector and its relative importance in the economy are higher. In the AI scenario under alternative
energy policies, these gains are slightly reduced because of the feed-in tariff polices. The total fiscal
costs of these tariffs range from 0.3 percent to 0.6 percent of GDP across countries and are
financed through increased lump-sum taxes, which slightly reduce household consumption.
However, the growth benefits from AI expansion far outweigh these costs, resulting in similar
average annual GDP growth across both scenarios.
In summary, although the AI-induced expansion of the IT sector is expected to raise global
GDP, the development also comes at the cost of higher carbon emissions. Drawing on a median
social cost of carbon estimate of $39 per ton—based on 147 published studies with more than
1,800 estimates (Moore and others 2024)—the additional social cost of 1.3 to 1.7 Gt of carbon-
dioxide-equivalent emissions is about $50.7 billion to $66.3 billion, or 1.3 percent to 1.7 percent
of the AI-driven increase in real world GDP between 2025 and 2030.

7 This estimate is conservative compared with that of Stern and Romani (2025), who project that AI’s energy demand could contribute

between 0.4 and 1.6 Gt of carbon dioxide equivalent annually by 2035.

International Monetary Fund | April 2025 49

CO M MO DI T Y S P EC IA L F EA TU R E: M AR K ET D E V EL O PM E NT S A N D T H E IM P A CT
O F AI O N EN E RG Y D E M AN D

Conclusions and Policy Implications

As AI technologies continue to evolve and proliferate, demand for computational power and
electricity is poised for a significant surge. Despite challenges related to higher electricity prices
and GHG emissions, the gains to global GDP from AI are likely to outweigh the costs of the
additional emissions. The economic benefits, however, may not be evenly distributed across
countries and among different groups within societies, potentially exacerbating existing
inequalities.
Increasing electricity demand from the IT sector will stimulate overall supply, which—if
sufficiently responsive—will lead to a small increase in electricity prices. More sluggish supply
responses will lead to much stronger price surges. In the United States, the country with the
largest expected surge in electricity demand, AI expansion alone could increase electricity prices
by up to 9 percent, adding to price pressures coming from many other sources.
In addition, under current energy policies, the AI-driven rise in electricity demand could add
1.7 Gt in global greenhouse gas emissions between 2025 and 2030, an amount similar to Italy’s
energy-related GHG emissions over a five-year period. The social cost of these extra emissions
is minor compared with the expected economic gains from AI, yet it still adds to the worrying
buildup of worldwide emissions.
Demand for computing and electricity from AI service producers is subject to wide
uncertainty, which may delay energy investments, causing underinvestment and higher prices.
Policymakers and businesses must work together to ensure AI achieves its full potential, while
minimizing societal costs.

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Annex Table 1.1.1. European Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
(Annual percent change, unless noted otherwise)
Real GDP Consumer Prices 1 Current Account Balance 2 Unemployment 3
Projections Projections Projections Projections
2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026
Europe 1.8 1.4 1.6 7.8 6.2 4.3 2.5 1.9 1.7 ... ... ...
Advanced Europe 1.0 1.0 1.3 2.3 2.2 2.0 3.1 2.6 2.4 5.8 5.9 5.8
Euro Area 4, 5 0.9 0.8 1.2 2.4 2.1 1.9 2.8 2.3 2.1 6.4 6.4 6.3
Germany –0.2 0.0 0.9 2.5 2.1 1.9 5.7 5.2 5.0 3.4 3.5 3.2
France 1.1 0.6 1.0 2.3 1.3 1.6 0.4 0.2 –0.2 7.4 7.7 7.4
Italy 0.7 0.4 0.8 1.1 1.7 2.0 1.1 0.9 0.9 6.6 6.7 6.7
Spain 3.2 2.5 1.8 2.9 2.2 2.0 3.0 2.4 2.2 11.3 11.1 11.0
The Netherlands 1.0 1.4 1.4 3.2 2.8 2.3 9.9 10.4 10.5 3.7 3.8 4.0
Belgium 1.0 0.8 1.0 4.3 3.2 2.1 –0.9 –1.1 –1.3 5.7 5.9 5.7
Ireland 1.2 2.3 2.1 1.3 1.9 1.7 17.2 11.6 11.0 4.3 4.5 4.7
Austria –1.2 –0.3 0.8 2.9 3.2 1.7 2.4 2.6 2.8 5.4 5.6 5.5
Portugal 1.9 2.0 1.7 2.7 1.9 2.1 2.2 1.7 1.5 6.5 6.4 6.3
Greece 2.3 2.0 1.8 3.0 2.4 2.1 –6.9 –6.5 –5.9 10.1 9.4 9.0
Finland –0.1 1.0 1.4 1.0 2.0 2.0 0.3 –0.5 –0.6 8.4 8.1 7.6
Slovak Republic 2.0 1.3 1.7 3.2 3.7 2.9 –2.8 –1.9 –1.5 5.4 5.8 5.9
Croatia 3.8 3.1 2.7 4.0 3.7 2.6 –1.2 –0.7 –0.6 5.5 5.3 5.3
Lithuania 2.7 2.8 2.5 0.9 3.5 2.8 2.5 2.0 1.7 7.1 6.6 6.1
Slovenia 1.6 1.8 2.4 2.0 2.6 2.3 4.4 3.6 3.3 3.7 3.9 4.0
Luxembourg 1.0 1.6 2.2 2.3 2.2 2.1 13.8 8.8 7.8 5.7 6.1 6.2
Latvia –0.4 2.0 2.5 1.3 2.4 2.4 –2.1 –2.5 –2.4 6.9 6.7 6.6
Estonia –0.3 0.7 1.8 3.7 5.8 3.9 –1.1 –2.6 –2.4 7.5 7.1 6.9
Cyprus 3.4 2.5 2.7 2.3 2.3 2.0 –6.8 –7.3 –7.8 4.9 4.8 5.0
Malta 6.0 3.9 3.9 2.4 2.1 1.9 6.1 6.2 6.1 3.1 3.1 3.1
United Kingdom 1.1 1.1 1.4 2.5 3.1 2.2 –3.4 –3.7 –3.7 4.3 4.5 4.4
Switzerland 1.3 0.9 1.6 1.1 0.2 0.5 5.1 5.0 5.2 2.4 2.8 2.8
Sweden 1.0 1.9 2.2 2.0 2.1 2.0 7.4 6.8 6.0 8.4 8.2 8.0
Czech Republic 1.1 1.6 1.8 2.4 2.5 2.0 1.8 –0.1 –0.6 2.8 2.5 2.4
Norway 2.1 2.1 1.7 3.1 2.6 2.2 17.1 15.9 15.1 4.0 3.9 3.9
Denmark 3.7 2.9 1.8 1.3 1.9 2.1 13.0 12.6 12.4 2.9 3.0 3.0
Iceland 0.5 2.0 2.4 5.9 3.5 2.7 –2.5 –1.9 –1.2 3.4 4.0 4.0
Andorra 3.4 1.9 1.6 3.1 2.2 1.8 15.1 16.9 16.9 1.4 1.6 1.8
San Marino 0.7 1.0 1.3 1.2 2.0 2.0 6.3 4.0 3.3 4.4 4.4 4.5
Emerging and Developing Europe 6 3.4 2.1 2.1 16.8 13.5 8.7 0.0 –1.0 –1.0 ... ... ...
Russia 4.1 1.5 0.9 8.4 9.3 5.5 2.9 1.9 1.8 2.5 2.8 3.5
Türkiye 3.2 2.7 3.2 58.5 35.9 22.8 –0.8 –1.2 –1.2 8.7 9.4 9.2
Poland 2.9 3.2 3.1 3.7 4.3 3.4 0.1 –0.3 –0.7 2.8 2.9 3.0
Romania 0.9 1.6 2.8 5.6 4.6 3.1 –8.3 –7.6 –7.4 5.4 5.4 5.2
Ukraine 7 3.5 2.0 4.5 6.5 12.6 7.7 –7.0 –15.9 –10.6 13.1 11.6 10.2
Hungary 0.5 1.4 2.6 3.7 4.9 3.6 2.2 1.0 1.1 4.5 4.6 4.2
Belarus 4.0 2.8 2.0 5.7 5.5 5.8 –2.8 –2.8 –2.9 3.0 2.9 2.9
Bulgaria 2.8 2.5 2.7 2.6 3.7 2.3 0.2 –1.5 –1.0 4.2 4.1 4.1
Serbia 3.9 3.5 4.2 4.7 4.0 3.3 –6.3 –5.8 –5.7 8.6 8.5 8.4
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Tables A6 and A7 in the Statistical Appendix.
2 Percent of GDP.
3 Percent. National definitions of unemployment may differ.
4 Current account position corrected for reporting discrepancies in intra-area transactions.
5 Based on Eurostat’s harmonized index of consumer prices except for Slovenia.
6 Includes Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, and North Macedonia.
7 See the country-specific note for Ukraine in the "Country Notes" section of the Statistical Appendix.

56 International Monetary Fund | April 2025

Annex Table 1.1.2. Asian and Pacific Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
(Annual percent change, unless noted otherwise)
Real GDP Consumer Prices 1 Current Account Balance 2 Unemployment 3
Projections Projections Projections Projections
2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026
Asia 4.6 3.9 4.0 2.1 1.8 2.0 2.6 2.0 1.8 ... ... ...
Advanced Asia 1.5 1.2 1.4 2.6 2.1 1.9 5.4 4.5 4.5 2.9 3.0 3.0
Japan 0.1 0.6 0.6 2.7 2.4 1.7 4.8 3.4 3.3 2.6 2.6 2.6
Korea 2.0 1.0 1.4 2.3 1.8 1.8 5.3 3.5 3.6 2.8 3.0 3.0
Australia 1.0 1.6 2.1 3.2 2.5 3.5 –1.9 –3.1 –3.4 4.0 4.3 4.5
Taiwan Province of China 4.3 2.9 2.5 2.2 1.8 1.6 15.7 18.5 19.6 3.4 3.4 3.4
Singapore 4.4 2.0 1.9 2.4 1.3 1.5 17.5 17.2 17.0 2.0 2.0 1.9
Hong Kong SAR 2.5 1.5 1.9 1.7 1.9 2.2 13.0 11.4 11.0 3.0 3.5 3.4
New Zealand –0.5 1.4 2.7 2.9 2.0 2.0 –6.0 –4.9 –4.7 4.7 5.3 5.3
Macao SAR 8.8 3.6 3.5 0.7 0.9 1.3 31.7 30.0 28.9 1.8 1.7 1.7
Emerging and Developing Asia 5.3 4.5 4.6 2.0 1.7 2.0 1.5 1.1 0.9 ... ... ...
China 5.0 4.0 4.0 0.2 0.0 0.6 2.3 1.9 1.7 5.1 5.1 5.1
India 4 6.5 6.2 6.3 4.7 4.2 4.1 –0.8 –0.9 –1.4 4.9 4.9 4.9
Indonesia 5.0 4.7 4.7 2.3 1.7 2.5 –0.6 –1.5 –1.6 4.9 5.0 5.1
Thailand 2.5 1.8 1.6 0.4 0.7 0.9 2.1 1.2 1.2 1.0 1.0 1.0
Vietnam 7.1 5.2 4.0 3.6 2.9 2.5 6.1 3.2 1.9 2.2 2.0 2.0
Malaysia 5.1 4.1 3.8 1.8 2.4 2.2 1.7 1.6 1.8 3.2 3.2 3.2
Philippines 5.7 5.5 5.8 3.2 2.6 2.9 –3.8 –3.4 –3.2 3.8 4.5 4.5
Other Emerging and Developing Asia 5/ 3.8 3.5 5.2 9.5 9.9 6.5 –0.2 –0.6 –0.9 ... ... ...
Memorandum
ASEAN-5 6 4.6 4.0 3.9 2.0 1.7 2.2 2.6 2.1 2.0 ... ... ...
Emerging Asia 7 5.4 4.6 4.6 1.6 1.4 1.8 1.6 1.2 0.9 ... ... ...
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Tables A6 and A7 in the Statistical Appendix.
2 Percent of GDP.
3 Percent. National definitions of unemployment may differ.
4 See the country-specific note for India in the "Country Notes" section of the Statistical Appendix.
5 Other Emerging and Developing Asia comprises Bangladesh, Bhutan, Brunei Darussalam, Cambodia, Fiji, Kiribati, Lao P.D.R., Maldives, the Marshall Islands, Micronesia, Mongolia,

Myanmar, Nauru, Nepal, Palau, Papua New Guinea, Samoa, the Solomon Islands, Sri Lanka, Timor-Leste, Tonga, Tuvalu, and Vanuatu.
6 Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
7 Emerging Asia comprises China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

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Annex Table 1.1.3. Western Hemisphere Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
(Annual percent change, unless noted otherwise)
Real GDP Consumer Prices 1 Current Account Balance 2 Unemployment 3
Projections Projections Projections Projections
2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026
North America 2.6 1.6 1.7 3.1 3.0 2.5 –3.5 –3.3 –2.9 ... ... ...
United States 2.8 1.8 1.7 3.0 3.0 2.5 –3.9 –3.7 –3.2 4.0 4.2 4.2
Mexico 1.5 –0.3 1.4 4.7 3.5 3.2 –0.3 –0.5 –1.1 2.7 3.8 3.8
Canada 1.5 1.4 1.6 2.4 2.0 2.1 –0.5 –0.1 –0.3 6.4 6.6 6.5
Puerto Rico 4 1.0 –0.8 –0.1 1.6 2.1 1.9 ... ... ... 6.2 6.5 6.1
South America 5 2.2 2.5 2.4 23.5 9.1 5.5 –1.3 –1.5 –1.5 ... ... ...
Brazil 3.4 2.0 2.0 4.4 5.3 4.3 –2.8 –2.3 –2.2 6.9 7.2 7.3
Argentina –1.7 5.5 4.5 219.9 35.9 14.5 1.0 –0.4 –0.3 7.2 6.3 6.0
Colombia 1.7 2.4 2.6 6.6 4.7 3.1 –1.8 –2.3 –2.4 10.2 10.0 9.8
Chile 2.6 2.0 2.2 3.9 4.4 3.2 –1.5 –2.1 –2.4 8.5 8.1 8.1
Peru 3.3 2.8 2.6 2.4 1.7 1.9 2.2 1.7 1.3 6.4 6.5 6.5
Ecuador –2.0 1.7 2.1 1.5 1.3 1.5 5.8 3.4 2.6 3.4 4.0 3.8
Venezuela 5.3 –4.0 –5.5 49.0 180.0 225.0 2.4 –0.1 –0.5 ... ... ...
Bolivia 1.3 1.1 0.9 5.1 15.1 15.8 –4.3 –2.5 –3.0 5.0 5.1 5.1
Paraguay 4.0 3.8 3.5 3.8 3.7 3.5 –3.9 –2.4 –2.7 5.8 5.7 5.7
Uruguay 3.1 2.8 2.6 4.8 5.5 5.3 –1.0 –1.5 –1.7 8.2 8.0 8.0
Central America 6 3.9 3.8 3.9 2.3 2.9 3.4 –0.9 –0.9 –1.3 ... ... ...
Caribbean 7 12.1 4.2 8.6 6.3 6.3 5.9 4.1 0.6 0.3 ... ... ...
Memorandum
Latin America and the Caribbean 8 2.4 2.0 2.4 16.6 7.2 4.8 –0.9 –1.1 –1.4 ... ... ...
Eastern Caribbean Currency Union 9 3.9 3.5 2.7 2.3 1.9 2.0 –10.4 –9.9 –8.3 ... ... ...
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Tables A6 and A7 in the Statistical Appendix. Aggregates exclude Venezuela.
2 Percent of GDP.
3 Percent. National definitions of unemployment may differ.
4 Puerto Rico is a territory of the United States, but its statistical data are maintained on a separate and independent basis.
5 See the country-specific notes for Argentina and Venezuela in the "Country Notes" section of the Statistical Appendix.
6 Central America refers to CAPDR (Central America, Panama, and the Dominican Republic) and comprises Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua,

and Panama.
7 The Caribbean comprises Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the

Grenadines, Suriname, and Trinidad and Tobago.

8 Latin America and the Caribbean comprises Mexico and economies from the Caribbean, Central America, and South America. See the country-specific notes for Argentina and Venezuela in the

"Country Notes" section of the Statistical Appendix.

9 Eastern Caribbean Currency Union comprises Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, as well as Anguilla and Montserrat,

which are not IMF members.

58 International Monetary Fund | April 2025

Annex Table 1.1.4. Middle East and Central Asia Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
(Annual percent change, unless noted otherwise)
Real GDP Consumer Prices 1 Current Account Balance 2 Unemployment 3
Projections Projections Projections Projections
2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026
Middle East and Central Asia 2.4 3.0 3.5 14.4 11.1 9.9 2.0 –0.1 –0.4 ... ... ...
Oil Exporters 4 2.5 2.6 3.1 8.5 10.3 10.0 4.2 1.4 0.9 ... ... ...
Saudi Arabia 1.3 3.0 3.7 1.7 2.0 2.0 –0.5 –4.0 –4.3 3.5 ... ...
Iran 3.5 0.3 1.1 32.6 43.3 42.5 2.7 0.9 1.3 7.8 9.5 9.2
United Arab Emirates 3.8 4.0 5.0 1.7 2.1 2.0 9.1 6.6 6.4 ... ... ...
Kazakhstan 4.8 4.9 4.3 8.7 9.9 9.4 –1.3 –3.6 –3.7 4.7 4.6 4.6
Algeria 3.5 3.5 3.0 4.0 3.7 3.6 –1.4 –3.9 –4.6 ... ... ...
Iraq 0.3 –1.5 1.4 2.6 2.5 2.7 2.0 1.5 1.5 ... ... ...
Qatar 2.4 2.4 5.6 1.1 1.2 1.4 17.2 10.8 10.3 ... ... ...
Kuwait –2.8 1.9 3.1 2.9 2.5 2.2 29.5 22.7 19.3 ... ... ...
Azerbaijan 4.1 3.5 2.5 2.2 5.7 4.5 7.8 7.8 4.1 5.4 5.3 5.3
Oman 1.7 2.3 3.6 0.6 1.5 2.0 2.2 –1.5 –2.5 ... ... ...
Turkmenistan 2.3 2.3 2.3 4.8 7.0 8.0 3.1 2.0 0.6 ... ... ...
Bahrain 2.8 2.8 3.0 0.9 1.0 1.5 4.9 3.3 1.7 5.9 ... ...
Oil Importers 5, 6 2.3 3.6 4.1 24.1 12.4 9.7 –3.9 –3.8 –3.5 ... ... ...
Egypt 2.4 3.8 4.3 33.3 19.7 12.5 –5.4 –5.8 –3.7 7.4 7.7 7.7
Pakistan 2.5 2.6 3.6 23.4 5.1 7.7 –0.5 –0.1 –0.4 8.3 8.0 7.5
Morocco 3.2 3.9 3.7 0.9 2.2 2.3 –1.4 –2.0 –2.2 13.3 13.2 12.9
Uzbekistan 6.5 5.9 5.8 9.6 8.8 7.2 –5.0 –5.0 –4.8 5.5 5.0 4.5
Tunisia 1.4 1.4 1.4 7.0 6.1 6.5 –1.7 –2.7 –3.1 ... ... ...
Sudan 7 –23.4 –0.4 8.8 176.8 100.0 63.2 –3.5 –3.6 –8.6 60.8 62.0 59.7
Jordan 2.5 2.6 2.9 0.2 3.6 2.6 –5.8 –5.5 –5.8 ... ... ...
Georgia 9.4 6.0 5.0 1.1 3.6 3.2 –4.4 –4.4 –4.7 13.9 13.9 13.9
Armenia 5.9 4.5 4.5 0.3 3.2 3.0 –3.9 –4.5 –4.8 13.0 13.5 14.0
Tajikistan 8.4 6.7 5.0 3.5 4.3 5.5 4.7 0.9 –2.1 ... ... ...
Kyrgyz Republic 9.0 6.8 5.3 5.0 7.0 5.7 –31.1 –8.5 –7.5 4.0 4.0 4.0
Mauritania 4.6 4.4 3.7 2.3 3.5 4.0 –5.8 –5.1 –4.8 ... ... ...
West Bank and Gaza 7 ... ... ... 52.9 ... ... ... ... ... ... ... ...
Memorandum
Caucasus and Central Asia 5.4 4.9 4.3 6.7 8.1 7.4 –1.3 –2.0 –2.6 ... ... ...
Middle East, North Africa, Afghanistan, and
Pakistan 6 1.9 2.6 3.4 15.7 11.7 10.3 2.5 0.2 0.0 ... ... ...
Middle East and North Africa 1.8 2.6 3.4 14.6 12.7 10.7 2.8 0.3 0.1 ... ... ...
Israel 7, 8 0.9 3.2 3.6 3.1 2.7 2.0 3.1 2.8 2.9 3.0 2.9 3.2
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Tables A6 and A7 in the Statistical Appendix.
2 Percent of GDP.
3 Percent. National definitions of unemployment may differ.
4 Includes Libya and Yemen.
5 Includes Djibouti, Lebanon, and Somalia. See the country-specific note for Lebanon in the "Country Notes" section of the Statistical Appendix.
6 Excludes Afghanistan and Syria because of the uncertain political situation. See the country-specific notes in the "Country Notes" section of the Statistical Appendix.
7 See the country-specific notes for Israel, Sudan, and West Bank and Gaza in the "Country Notes" section of the Statistical Appendix.
8 Israel, which is not a member of the economic region, is shown for reasons of geography but is not included in the regional aggregates.

International Monetary Fund | April 2025 59

 CH AP T ER 1 G LO B AL PR O SP E CT S A ND PO LI CI E S

Annex Table 1.1.5. Sub-Saharan African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
(Annual percent change, unless noted otherwise)
Real GDP Consumer Prices 1 Current Account Balance 2 Unemployment 3
Projections Projections Projections Projections
2024 2025 2026 2024 2025 2026 2024 2025 2026 2024 2025 2026
Sub-Saharan Africa 4.0 3.8 4.2 18.3 13.3 12.9 –1.7 –2.5 –2.2 ... ... ...
Oil Exporters 4 3.4 2.7 3.1 29.8 23.6 29.5 6.4 3.8 2.7 ... ... ...
Nigeria 3.4 3.0 2.7 33.2 26.5 37.0 9.1 6.9 5.2 ... ... ...
Angola 4.5 2.4 2.1 28.2 22.0 16.4 5.4 2.1 1.4 ... ... ...
Gabon 3.1 2.8 2.6 1.2 1.5 2.0 4.5 2.2 0.6 ... ... ...
Chad 1.5 1.7 3.2 5.7 3.9 3.5 –1.3 –3.4 –2.8 ... ... ...
Equatorial Guinea 1.9 –4.2 0.0 3.2 4.0 3.5 –2.4 –1.7 –2.4 ... ... ...
Middle-Income Countries 5 3.1 3.4 3.6 6.4 5.4 4.8 –2.4 –2.5 –2.3 ... ... ...
South Africa 0.6 1.0 1.3 4.4 3.8 4.5 –0.6 –1.2 –1.4 32.8 32.8 32.7
Kenya 4.5 4.8 4.9 4.5 4.1 4.9 –3.7 –3.9 –4.2 ... ... ...
Ghana 5.7 4.0 4.8 22.9 17.2 9.4 1.6 1.6 1.3 ... ... ...
Côte d'Ivoire 6.0 6.3 6.4 3.5 3.0 2.2 –4.2 –3.6 –2.1 ... ... ...
Cameroon 3.6 3.6 4.0 4.5 3.4 3.0 –3.3 –2.8 –3.9 ... ... ...
Senegal 6.7 8.4 4.1 0.8 2.0 2.0 –12.1 –8.2 –6.2 ... ... ...
Zambia 4.0 6.2 6.8 15.0 14.2 9.2 –1.7 0.5 2.6 ... ... ...
Low-Income Countries 6 6.0 5.7 6.3 23.3 13.3 7.2 –6.0 –6.5 –5.0 ... ... ...
Ethiopia 8.1 6.6 7.1 21.7 21.5 12.2 –4.2 –4.8 –3.2 ... ... ...
Tanzania 5.4 6.0 6.3 3.2 4.0 4.0 –3.1 –3.0 –2.9 ... ... ...
Democratic Republic of the Congo 6.5 4.7 5.2 17.7 8.9 7.2 –4.1 –2.9 –2.5 ... ... ...
Uganda 6.3 6.1 7.6 3.3 4.2 4.7 –7.3 –6.4 –4.2 ... ... ...
Mali 4.4 4.9 5.1 3.2 3.0 2.0 –6.1 –5.1 –1.6 ... ... ...
Burkina Faso 4.4 4.3 4.5 4.2 3.0 2.5 –6.4 –2.1 –2.0 ... ... ...
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Movements in consumer prices are shown as annual averages. Year-end to year-end changes can be found in Tables A6 and A7 in the Statistical Appendix.
2 Percent of GDP.
3 Percent. National definitions of unemployment may differ.
4 Includes Republic of Congo and South Sudan.
5 Includes Benin, Botswana, Cabo Verde, the Comoros, Eswatini, Lesotho, Mauritius, Namibia, São Tomé and Príncipe, and Seychelles.
6 Includes Burundi, Central African Republic, Eritrea, The Gambia, Guinea, Guinea-Bissau, Liberia, Madagascar, Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Togo, and Zimbabwe.

60 International Monetary Fund | April 2025

Annex Table 1.1.6. Summary of World Real per Capita Output
(Annual percent change; in constant 2021 international dollars at purchasing power parity)
Average Projections
2007–16 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
World 2.0 2.5 2.5 1.8 –3.9 5.6 2.7 2.4 2.7 1.8 2.0
Advanced Economies 0.8 2.1 1.8 1.5 –4.4 5.8 2.4 0.9 1.2 0.9 1.2
United States 0.7 1.8 2.4 2.1 –3.0 5.7 2.0 2.1 1.9 1.2 1.1
Euro Area 1 0.4 2.4 1.5 1.4 –6.4 6.3 3.1 –0.1 0.5 0.5 0.9
Germany 1.1 2.3 0.8 0.8 –4.2 3.6 0.6 –1.1 –0.5 –0.2 0.8
France 0.3 2.0 1.3 1.7 –7.8 6.4 2.1 0.8 0.8 0.4 0.7
Italy –0.9 1.8 1.0 0.6 –8.6 9.7 5.2 0.8 0.8 0.5 0.9
Spain 0.0 2.6 1.8 1.1 –11.1 6.5 4.9 1.5 2.2 1.2 0.6
Japan 0.5 1.8 0.8 –0.2 –3.9 3.0 1.3 2.0 0.6 1.0 1.1
United Kingdom 0.4 2.0 0.8 1.1 –10.7 8.3 4.3 –0.9 0.0 0.1 0.6
Canada 0.4 1.8 1.3 0.4 –6.1 5.3 2.5 –1.3 –1.4 0.4 1.6
Other Advanced Economies 2 1.9 2.5 2.1 1.3 –2.2 6.0 1.9 0.6 1.7 1.4 1.5

Emerging Market and Developing Economies 3.7 3.3 3.4 2.4 –3.1 5.9 3.1 3.6 3.7 2.7 2.8
N Emerging and Developing Asia 6.5 5.6 5.6 4.5 –1.4 7.1 4.1 5.5 4.7 4.0 4.1
G China 8.4 6.3 6.4 5.7 2.2 8.5 3.2 5.5 5.1 4.2 4.2
D India 3 5.4 5.6 5.3 2.8 –6.7 8.8 6.9 8.3 5.5 5.3 5.4
P Emerging and Developing Europe 2.1 3.6 3.4 2.3 –1.9 7.5 1.9 3.8 3.7 2.3 2.1
Russia 1.5 1.6 2.7 2.1 –2.5 6.2 –1.1 4.4 4.3 1.8 1.2
_ Latin America and the Caribbean 1.2 0.3 0.2 –0.9 –8.0 6.6 3.5 1.6 1.6 1.3 1.6
R Brazil 1.2 0.7 1.1 0.6 –3.9 4.3 2.6 2.8 3.0 1.6 1.6
_ Mexico 0.2 0.9 1.0 –1.3 –9.1 5.4 2.9 2.4 0.6 –1.1 0.6
P Middle East and Central Asia 1.4 0.0 0.9 0.1 –4.3 2.6 3.2 0.1 4.6 1.1 1.7
P Saudi Arabia 0.2 0.8 5.9 1.5 –8.1 7.7 2.8 –5.3 –3.3 1.0 1.7
P Sub-Saharan Africa 1.7 0.1 0.6 0.4 –4.3 2.0 1.5 1.0 1.2 1.2 1.5
_ Nigeria 2.8 –1.8 –0.7 –0.4 –4.3 1.1 0.7 0.3 0.9 0.6 0.3
South Africa 0.6 –0.3 0.0 –1.3 –7.5 3.8 0.7 –0.8 –0.9 –0.5 –0.2
P
C Memorandum
_ European
ASEAN-5 4
Union 0.7
3.6
2.8
4.0
2.1
3.8
1.8
3.2
–5.7
–5.5
6.6
3.3
3.4
4.5
0.1
3.1
0.8
3.6
0.9
3.0
1.3
3.0
P Middle East and North Africa 1.1 –0.5 0.5 –0.3 –4.5 2.8 3.2 0.0 –0.3 0.8 1.6
C Emerging Market and Middle-Income Economies 3.9 3.6 3.7 2.7 –2.9 6.6 3.4 4.0 3.6 3.0 3.1
H Low-Income Developing Countries 2.8 2.0 2.2 2.5 –2.7 1.7 2.3 1.6 3.0 1.9 2.8
Source: IMF staff estimates.
Note: Data for some countries are based on fiscal years. Please refer to Table F in the Statistical Appendix for a list of economies with exceptional reporting periods.
1 Data are calculated as the sum of those for individual euro area countries.
2 Excludes the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.
3 See the country-specific note for India in the "Country Notes" section of the Statistical Appendix.
4 ASEAN-5 comprises Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

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