(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 14. The International Monetary Fund (IMF) forecasts that global economic growth will slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026, Trend reports, citing the latest World Economic Outlook.

While slightly improved from the July update, the projections remain 0.2 percentage points below forecasts made before policy shifts in October 2024, reflecting ongoing headwinds from uncertainty and protectionism.

Advanced economies are expected to expand by around 1.5% in 2025–26, with the United States slowing to 2.0%. Emerging market and developing economies are projected to moderate to just above 4%. On an end-of-year basis, global growth is set to decelerate from 3.6% in 2024 to 2.6% in 2025.

Global inflation is anticipated to ease to 4.2% in 2025 and 3.7% in 2026. While inflation remains above target in the United States, much of the rest of the world is expected to see subdued price pressures. World trade volume is forecast to grow 2.9% on average in 2025–26, slower than the 3.5% expansion in 2024, with continued trade fragmentation limiting gains.

The IMF highlights several downside risks, including prolonged policy uncertainty, rising protectionism, labor supply shocks, financial market vulnerabilities, and commodity price spikes driven by climate or geopolitical tensions. An abrupt repricing of tech stocks or setbacks in AI-related productivity gains could also affect global financial stability.

On the upside, breakthroughs in trade negotiations, renewed reform momentum, and faster productivity growth from AI could support medium-term economic expansion.

The IMF emphasizes that policy credibility, institutional independence, and sound governance will be critical to navigating these challenges and sustaining growth.

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