The International Monetary Fund’s report (“World Economic Outlook: A Critical Juncture amid Policy Shifts”) presented very interesting historical facts, estimates and forecasts of the global economy in 2025 and 2026.
According to the IMF forecast, global growth rates will be lower and will be in the range of 2.8% in 2025 and 3% in 2026, compared with the level of 3.3%, which was predicted for both years back in January 2025. Growth in advanced economies is expected to reach 1.4% in 2025, while growth in the United States may slow to 1.8% due to increased uncertainty about economic policy, trade tensions and weakening demand dynamics. Economic growth in the euro area will also slow down by 0.2% to 0.8%. In emerging and developing economies, growth will slow to 3.7% in 2025 and 3.9% in 2026. At the same time, growth is expected to decline significantly for the countries most affected by recent trade measures, such as China. Global overall inflation is projected to decline slightly more slowly than expected in January 2025, reaching 4.3% in 2025 and 3.6% in 2026. At the same time, the forecast for 2025 has been significantly adjusted upward for advanced economies, while it has been slightly lowered for emerging and developing countries. Governments of advanced economies are also expected to tighten fiscal policy on average in 2025-26 and, to a lesser extent, in 2027.
As noted in the IMF report, a rapid escalation of trade tensions and an extremely high level of uncertainty in global politics will have a significant impact on global economic activity. The forecast is dominated by the position that further increased uncertainty in trade policy may lead to an even greater slowdown in global economic growth in the short and long term. Thus, global trade growth is expected to slow down to 1.7 percentage points in 2025. This forecast reflects the strengthening of tariff restrictions affecting trade flows.
The IMF forecasts that growth in Central Asia will accelerate from an estimated 2.4 percent in 2024 to 3.0 percent in 2025 and 3.5 percent in 2026. GDP growth in Central Asian countries is projected as follows: in Kazakhstan in 2025 – 4.9%, in 2026 – 4.3%; Kyrgyzstan in 2025 – 6.8%, in 2026 – 5.3%; Tajikistan in 2025 – 6.7%, in 2026 – 5.0%; Turkmenistan in 2025 – 2.3%, in 2026 – 2.3%; Uzbekistan in 2025 – 5.9%, in 2026 – 5.8%.
In connection with the emerging trends in the global economy, the IMF in its report calls for prudent actions and increased cooperation, emphasizing that the first priority should be to restore stability in trade policy and develop mutually beneficial agreements. According to the IMF, the global economy needs a clear and predictable trading system that addresses long-standing weaknesses in international trade rules, including the widespread use of non-tariff barriers or other trade-distorting measures. This will require improved cooperation.
Summing up, it should be noted that the situation in the global economy has changed dramatically, and government agencies in almost many countries are reviewing the priorities of their foreign and domestic economic policies.
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
