IMF slightly hikes global growth forecast

While downside risks remain, “all is not gloomy” for global economic growth in 2025, the US-headquartered financial agency said, in its October World Economic Outlook (WEO).

IMAGE: Oil pump jacks. Getty Images

The agency, which represents 190 member countries, projects global gross domestic product (GDP) growth to increase to 3.2% in 2025, up from the 3% projected in July. In 2026, it expects world GDP to grow by 3.1%.

Resolving policy uncertainty, specially between the world’s two largest consumers – the US and China, as well as lowering tariffs “would provide a significant lift to the global economy,” the IMF said.

Oil price forecast

Crude oil prices are expected to average $68.92/bbl in 2025 and $65.84/bbl in 2026, the agency has projected. “Prices of fuel commodities are projected to decline in 2025 by 7.9 percent and in 2026 by 3.7 percent. This is driven by a decline in oil prices,” the IMF said.

The tariff-saga between Washington and Beijing has led to the drop in oil prices, the IMF said earlier. Strong global supply from both OPEC and non-OPEC producers, coupled with tepid global demand growth have further contributed to bringing prices down.

“The tariff announcements induced a decrease in global demand expectations,” the IMF said, adding that it coincided with the start of production hikes schedule by eight members of OPEC+.

While potential disruptions to Russian supply pose upside risks to oil prices, the prospect of faster OPEC+ output increases, coupled with a tariff-driven slowdown in global economic activity, continue to exert downward pressure.

Risks around the price forecast “are balanced,” according to the agency. “All the while, higher-cost producers set a loose price floor, with some US breakeven prices in the low to mid $60s,” the IMF said.

By Aparupa Mazumder

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