The International Monetary Fund (IMF) has cautioned that the global economy is losing momentum as nations adjust to a shifting environment marked by trade tariffs, tighter fiscal policies, and ongoing policy recalibrations.

In its latest World Economic Outlook, released on Tuesday, October 14, 2025, the Fund projects global growth to slow from 3.3% in 2024 to 3.2% in 2025, and further to 3.1% in 2026 — a modest improvement from its April forecast but still signaling a steady deceleration.

According to the IMF, the global economic landscape is being reshaped by a combination of new policy measures and evolving trade dynamics. While the initial effects of tariffs were partly offset by new trade agreements and temporary export surges earlier this year, those one-off supports are now dissipating.

Advanced economies are expected to expand by about 1.5%, reflecting the impact of higher borrowing costs and fiscal consolidation, while emerging markets and developing economies are projected to grow slightly above 4%, buoyed by strong domestic demand across Asia and Latin America.

The IMF noted that global inflation continues to ease but remains uneven — still above target in the United States, yet subdued in many other regions.

Risks to the outlook remain tilted to the downside, the Fund warned, citing persistent policy uncertainty, rising protectionism, and potential labor market disruptions. It also cautioned that fiscal vulnerabilities and abrupt financial market corrections could threaten broader economic stability.

To safeguard growth prospects, the IMF urged governments to rebuild fiscal buffers, uphold central bank independence, and accelerate structural reforms aimed at improving productivity and restoring business confidence.

“Policymakers must focus on ensuring resilience and credibility in their economic frameworks to sustain recovery and medium-term growth,” the Fund emphasized.