Economic Outlook: Navigating Inflation and Growth Challenges

The International Monetary Fund (IMF) has forecast global economic growth at 2.8% for 2025 and 3.0% for 2026. Despite moderate growth projections, global headline inflation is expected to decline gradually to 4.3% in 2025 and further ease to 3.6% by 2026.

The IMF analysis indicates that low-income countries could potentially boost their GDP by up to 7% by maximizing tax potential. Recent economic indicators underline a complex landscape influenced by ongoing trade tensions and associated economic dynamics.

While cooling demand and reduced energy prices suggest a gradual decline in inflation, there is considerable variability across countries. Despite some improvement due to trade agreements reducing tariffs, potential downside risks maintain a cloud of uncertainty over the economic forecast, with updates expected by the end of July.

(With inputs from agencies.)