July 29, (THEWILL) — The International Monetary Fund (IMF) has revised its global growth projection upward to 3.0 percent for 2025, citing easing trade distortions, lower tariffs, and improved financial conditions.
In its World Economic Outlook (WEO) Update for July 2025 released on Tuesday, the IMF also forecast global growth at 3.1 percent for 2026,an increase of 0.2 percentage points for 2025 and 0.1 percentage point for 2026 compared to its April 2025 projections.
The Fund further projected global headline inflation to decline to 4.2 percent in 2025 and 3.6 percent in 2026, maintaining a trajectory similar to earlier estimates.
IMF Chief Economist, Pierre-Olivier Gourinchas, explained that the upgraded global outlook reflects stronger-than-anticipated growth momentum, softer tariff policies, a weaker US dollar, and fiscal expansion in some economies.
“Global inflation is expected to fall, but US inflation is projected to remain above target. Downside risks from potentially higher tariffs, persistent geopolitical tensions, and elevated uncertainty still loom,” Gourinchas said.
He warned that renewed tariff hikes or failed trade negotiations could undermine global economic activity, while larger fiscal deficits and growing investor caution might drive up long-term interest rates and tighten global financial conditions.
“Combined with fragmentation concerns, this could reignite volatility in financial markets,” the report noted. It added, however, that successful trade negotiations and reduced tariffs could lift global growth prospects.
“Policies need to bring confidence, predictability, and sustainability by calming tensions, preserving price and financial stability, restoring fiscal buffers, and implementing much-needed structural reforms,” the Fund advised.
Regional and Country Forecasts
The IMF also raised its growth forecast for sub-Saharan Africa to 4.0 percent for 2025 and 4.3 percent for 2026—representing a 0.2 and 0.1 percentage point increase, respectively, from April’s estimates.
“Growth is expected to be relatively stable in 2025 in sub-Saharan Africa at 4.0 percent, before picking up to 4.3 percent in 2026,” the report said.
For Nigeria, the Fund upgraded its 2025 economic growth forecast to 3.4 percent, up from 3.0 percent projected in April—a 0.4 percentage point increase. It also raised Nigeria’s 2026 growth projection to 3.2 percent, from the earlier forecast of 2.7 percent, reflecting a 0.5 percentage point improvement.
The revised figures reflect growing optimism around macroeconomic reforms, improved oil production, and a gradual easing of inflationary pressures in Nigeria.
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