Summary
The global economy is expected to grow at a sluggish and below-trend rate for the next several quarters, according to the World Economic Outlook from the International Monetary Fund. The world economy is expected to expand at a 2.8% rate in 2025 and a 3% rate in 2026, down from 3.3% in 2024. Though solid, these rates are below the long-term historical global growth rate of 3.8%, due to the impact of tariff uncertainty, inflation, and higher interest rates. For industrialized economies (the U.S., Europe, Japan, etc.), growth is forecast at 1.4% in 2025, followed by 1.5% in 2026. These forecasts have been lowered in recent months due to trade wars. Among the industrialized regions, the U.S. economy is expected to grow the fastest this year, at a 1.8% rate, while Japan’s forecast is for 0.6% and Europe is estimated at 0.8%. For emerging economies (China, India, Russia, Brazil, Saudi Arabia, etc.), growth forecasts call for 3.7% in 2025 and 3.9% in 2026. The clear leaders are expected to be India and China, with average growth for the two years of 6.2% and 4.0%, respectively. These growth nations have different drivers: population growth in India, which points toward commodity and industrial-based infrastructure products; and productivity growth in China, which suggests
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