IMF Boosts Economic Growth Forecast: Emerging Markets on the Rise

The International Monetary Fund (IMF) has revised its forecast for economic growth among emerging markets and developing economies, raising expectations to 4.1% for this year. This update reflects improvements in China's economic activities and reduced tariff tensions with the U.S., according to the IMF's World Economic Outlook report released Tuesday.

China's forecast saw the most significant boost, with the IMF now predicting a 4.8% expansion, a considerable increase from the previously anticipated 4.0%. This positive outlook is attributed to stronger-than-expected activities in early 2025 and a substantial easing of tariffs between the U.S. and China. The effective U.S. tariff rate used in these predictions is now considered to be 17.3%, a drop from earlier calculations of 24.4%.

While the global outlook remains optimistic, with the IMF adjusting the global GDP growth forecast to 3.0% for 2025, some countries like Russia and South Korea have seen downgraded expectations. Despite this, the overall cautious optimism is tempered by the precarious trade policy environment, with ongoing negotiations in Stockholm and potential tariff increases looming.

(With inputs from agencies.)