The Fund urged governments, particularly in developing regions such as Africa, to rebuild fiscal resilience and safeguard financial stability.
In a statement to the Development Committee released on Monday, IMF Managing Director Kristalina Georgieva said the world economy is projected to expand by 3.2% in 2025 and 3.1%in 2026, down from an estimated 3.3% in 2024.
While the global recovery has shown surprising resilience, the IMF cautioned that the momentum is fading as temporary supports, such as supply chain restocking and short-term trade gains, begin to wane.
Advanced economies are expected to experience the steepest slowdown, with growth in the United States dropping from 2.8% in 2024 to 2.0% in 2025, while growth in the euro area will remain subdued. Emerging market and developing economies will see growth ease to 4.2%next year, reflecting weak trade and softer commodity prices.
For Sub-Saharan Africa, growth is projected to remain stable at around 4.1%, supported by stabilising inflation, gradual policy reforms, and a recovery in key export sectors. However, limited fiscal space, rising borrowing costs, and declining concessional aid continue to constrain investment and job creation across the region.
Inflation, which surged following the COVID-19 pandemic and the Ukraine conflict, is expected to continue easing globally. The IMF forecasts that average inflation will fall from 6.4% in 2024 to 4.8% in 2025, though food and fuel prices remain volatile, particularly in developing countries. Central banks are advised to maintain vigilance and avoid premature monetary easing that could reignite price pressures.
The IMF also raised concerns about mounting sovereign debt risks, especially among low-income developing countries. It noted that more than half of these economies are now in, or at high risk of, debt distress. Restoring debt sustainability, improving transparency, and strengthening domestic resource mobilisation are essential for maintaining stability, Georgieva said.
The Fund called for renewed international cooperation to address global trade tensions, strengthen financial safety nets, and ensure fair access to green and digital investment opportunities.
Reaffirming its commitment to support vulnerable economies, the IMF said it will continue to provide financial assistance, policy advice, and technical capacity-building, in partnership with the World Bank, to help countries achieve sustainable growth and resilience in a more fragmented global economy.
–IMF/ChannelAfrica–
