The recent U.S. election, war, climate change, the remnants of inflation, there are so many challenges right now that it’s hard to predict what lies ahead for the world’s economy. Fortunately the IMF is in the business of doing just that.

Global economic growth is projected to stay steady at 3.2% in both 2024 and 2025, according to the latest World Economic Outlook. However, while the overall figure remains unchanged from earlier forecasts, underlying trends reveal notable shifts across regions.

In the United States, upgrades to economic projections have offset downgrades in other advanced economies, particularly in major European countries. Emerging market and developing economies face varied challenges, with disruptions in commodity production and shipping—especially oil—alongside conflicts, civil unrest, and extreme weather. These factors have resulted in downgrades for regions such as the Middle East, Central Asia, and sub-Saharan Africa. However, emerging Asia has seen positive revisions due to increased demand for semiconductors and electronics, driven by investments in artificial intelligence.

While global growth remains stable, the longer-term outlook remains lackluster. Projections for 2029 show growth at just 3.1%, falling short of pre-pandemic averages. Structural issues, such as aging populations and weak productivity growth, continue to weigh down economic potential across many nations.

Inflation rates are gradually coming down as economic imbalances ease. Global inflation is expected to decrease from 6.7% in 2023 to 5.8% in 2024 and 4.3% in 2025. Advanced economies are forecasted to reach their inflation targets sooner than developing countries, although challenges remain. Prices for goods have stabilized, but inflation in the services sector remains elevated, emphasizing the need for careful monetary policy adjustments.

Risks to the global economy persist, particularly due to elevated policy uncertainty. Geopolitical tensions, commodity price spikes, and potential disruptions in China’s property sector all pose threats to economic stability. Emerging markets, especially those with significant external financing needs, could face capital outflows and debt distress if financial market volatility worsens.

The report also highlights the growing importance of fiscal and structural reforms. Many countries need to address public debt and rebuild fiscal buffers, while ensuring vulnerable populations are protected. Multilateral cooperation will be key in addressing these challenges, particularly in areas like climate change and debt restructuring.

As the global economy navigates these uncertainties, careful policy coordination will be essential to ensure a smooth recovery and sustainable growth.