In sub-Saharan Africa, regional growth is expected to ease further, with the IMF warning of increased downside risks. The possibility of a recession in the United States adds to the uncertainty, particularly for countries with strong trade or financial linkages to the U.S. economy.
Global inflation is also projected to decline more slowly than previously anticipated, with headline inflation now expected to average 4.3 per cent in 2025 and 3.6 per cent in 2026, BusinessDay reports.
While inflation in advanced economies has seen upward revisions, emerging and developing markets are expected to see slightly lower inflation than initially forecast.
The IMF noted that central banks, particularly the U.S. Federal Reserve, are navigating a delicate period. While inflation remains sticky, projected to stay around 3 per cent in the U.S., additional price pressures are expected due to the recently implemented tariffs.
With governments around the world reassessing their policy frameworks and shifting priorities, the Fund cautioned that the unpredictability of the current environment is making economic forecasting more difficult than ever.
“The landscape has changed dramatically since the start of the year, and the unfolding of these trade measures is a significant negative shock to global growth,” the IMF said.