The International Monetary Fund (IMF) raised its forecast for global real GDP growth in 2025 to 3.2%, citing improved financial conditions. It also mentioned lower-than-expected tariff pressures as another reason for the upward revision of the global growth projection.
However, the Fund warned that rising trade tensions, especially between the United States and China, could threaten this positive outlook.
According to the IMF, several encouraging factors drove the stronger projection, including a weaker U.S. dollar and resilient private-sector performance. Businesses showed strength despite earlier tariff concerns and continued growing investment in artificial intelligence (AI) and other technology sectors.
Still, the Fund cautioned that worsening trade disputes or new export restrictions could reverse these gains and reduce global growth. Such developments might cut global growth by as much as 1–1.8 percentage points between 2026 and 2027, the IMF noted.
Policymakers continue to focus on how emerging and developing economies will handle global shocks and ongoing market uncertainties.
In many African countries, including Nigeria, indirect spill-over effects such as weaker global demand and volatile commodity prices remain concerns. Currency depreciation adds to the pressure, especially as supply chains shift and trade flows realign across major international markets.
Economies that depend heavily on raw-material exports or foreign investment could face greater pressure and slower economic stability.
The World Trade Organization (WTO) also raised concern, warning that a prolonged economic divide between the U.S. and China could worsen. It stated that such a division could reduce global GDP by up to 7% in the long run.
The WTO emphasized that developing nations face particular vulnerability due to the uncertainty surrounding global trade policy changes.
The IMF’s latest analysis highlights the expanding influence of AI and digital-economy investment as new and powerful growth drivers. The U.S. economy, for example, will likely grow by 2% in 2025 and 2.1% in 2026, according to projections.
AI-related investments have played a major role in helping the U.S. avoid an anticipated recession and maintain economic resilience.
However, the Fund warned that inflated tech valuations and overly optimistic investor expectations could create risks for future stability. If growth momentum slows or input costs rise, these vulnerabilities could expose weaknesses in the tech-driven economic expansion.
Moreso, China continues to outperform earlier projections, with growth expected to reach 4.8% in 2025, according to the IMF. The Fund attributes this performance to stronger domestic demand and a more diversified trade network beyond the U.S. market.
Still, challenges such as a sluggish property sector, demographic decline, and financial-system vulnerabilities remain major obstacles to growth.
Although global growth shows improvement, the benefits remain unevenly distributed among advanced and developing economies around the world. Many lower-income countries still struggle to keep pace with advanced economies, despite modest improvements in global averages.
The widening gap highlights the danger of slower progress in regions that lack access to sufficient investment and modern technology.
In the coming years, how countries adapt to policy shifts and trade realignments will determine their long-term economic stability. Their ability to manage investment trends and global market changes will define who maintains steady growth or faces a deeper slowdown.
