World Economic Outlook Update, January 2025: Global Growth: Divergent and Uncertain
World Economic Outlook
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Growth projections and headline figures
- The World Economic Outlook Update, January 2025 projects global growth at 3.3 percent both in 2025 and 2026.
- Global growth at 3.3 percent in 2025 and 2026 is described as broadly unchanged from the October 2024 World Economic Outlook (WEO) forecast.
- The 3.3 percent global growth projection is noted as below the historical (2000–19) average of 3.7 percent.
Inflation outlook
- Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026.
- Inflation is expected to converge back to target earlier in advanced economies than in emerging market and developing economies.
Divergence and near-term dynamics
- The near-term outlook is characterized by divergent paths and elevated policy uncertainty.
- The forecast for 2025 is primarily unchanged because an upward revision in the United States offsets downward revisions in other major economies.
- Upside risks could lift already-robust growth in the United States in the short run, whereas risks in other countries are on the downside amid elevated policy uncertainty.
Risks to the baseline and policy implications
- Medium-term risks to the baseline are tilted to the downside.
- Policy-generated disruptions to the ongoing disinflation process could interrupt the pivot to easing monetary policy, with implications for fiscal sustainability and financial stability.
- Managing these risks requires balancing trade-offs between inflation and real activity, rebuilding buffers, and lifting medium-term growth prospects.
Policy recommendations and priorities
- The Update recommends a policy mix that balances trade-offs and rebuilds buffers.
- It calls for stepped-up structural reforms and stronger multilateral rules and cooperation to lift medium-term growth prospects.