Despite ongoing uncertainty caused by the tariffs imposed by Donald Trump and the trade frictions they have sparked, the global economy continues to show welcome resilience, both in 2025 and 2026, according to the latest data released Tuesday by the International Monetary Fund (IMF).
The institution expects global growth to reach 3.2% this year — 0.2 percentage points higher than its July forecast, which had already been revised upward by the same margin.
This momentum is projected to continue into 2026, with world growth forecast at 3.1%.
In its annual World Economic Outlook (WEO) report, the IMF noted that the current climate of uncertainty complicates its forecasting work, even though U.S. tariffs have now stabilized at levels much higher than a year ago, offering slightly more visibility.
However, the trend confirms what has been observed since the COVID-19 pandemic: global GDP continues to grow, though at a slower pace.
These projections were made before the latest escalation in tensions between Washington and Beijing and the threat of new tariffs from Donald Trump.
“We have an alternative downside growth scenario,” admitted the IMF’s Chief Economist Pierre-Olivier Gourinchas at a press conference. “It shows that the economy could take a more concerning turn if trade tensions rise further.”
Gourinchas also reminded that the full transfer of the impact of tariffs to the economy “takes time.”
“The trade shock has been somewhat less severe than anticipated,” he added, citing new trade agreements and exemptions between the U.S. and several of its key partners, as well as the fact that many of them “have refrained from retaliatory measures.”
Still, the consequences of U.S. protectionism are being felt — notably in the reorientation of trade flows, with China trading more with Asia and Europe and less with the United States.
A cautious Europe
For the world’s largest economy, tariffs have contributed to a slowdown, with U.S. growth expected to remain above 2% in 2025 (revised to 2.0%, up 0.1 points from July) and to reach 2.1% in 2026.
Investment in artificial intelligence (AI) continues to support U.S. growth, but the economy faces headwinds from a softening labor market and a slower pace of consumption.
However, Gourinchas warned of potential risks: “If AI-related investment and consumption strengthen further, it could lead to monetary tightening to contain inflation,” even as the Federal Reserve moves toward lowering rates.
He also cautioned about a sharp market correction if expected earnings fail to materialize, which could result in a loss of wealth, consumption, and investment, weighing on growth.
In the euro area, growth should reach 1.2% in 2025, slightly above July’s forecast of 1%, but remain sluggish in 2026 at 1.1%.
The German, French, and Italian economies are all expected to grow below 1% in 2026 — 0.9% for Germany and France, 0.8% for Italy.
A notable exception is Spain, whose economy is set to grow 2.9% this year, the best performance among advanced economies, before moderating to 2% in 2026.
The IMF’s outlook for China remains unchanged, with growth expected to stay below 5% — 4.8% in 2025 and 4.2% in 2026.
“There are serious questions about China’s growth model,” said Gourinchas, pointing to the real estate bubble as “a key weakness” and warning that an export-driven growth model is unsustainable, especially as the Chinese economy “remains close to deflation.”
Initially feared to enter recession, Mexico is now expected to weather the U.S. tariffs better than expected, with growth revised to 1% in 2025 and 1.5% in 2026.
