Global growth is projected to stabilize at 3.3% this year and 3.2% next year, with the current improvement primarily driven by China and the United States.

Screenshot from the World Economic Outlook report.

The headwinds from US tariff policies are being offset by the tailwinds from the wave of artificial intelligence (AI) investment, with the world economy demonstrating unexpected resilience amidst uncertainty.

In its latest World Economic Outlook, the International Monetary Fund (IMF) forecasts that global economic growth will stabilize at 3.3% this year and 3.2% next year, representing an upward revision of 0.2 percentage points for this year and no change for next year compared to the October projections. This round of improvement is mainly attributed to the two largest economies, the United States and China.

According to the latest forecasts, the US economic growth rates for this year and next are projected at 2.4% and 2.0%, respectively, which are 0.3 percentage points higher and 0.1 percentage points lower than the predictions from three months ago. For China, the figures are 4.5% and 4.0%, representing an increase of 0.3 percentage points and a decrease of 0.2 percentage points, respectively.

It was noted that this unexpectedly strong performance reflects a combination of factors, including easing trade tensions, stronger-than-expected fiscal stimulus, accommodative financial conditions, the private sector’s agile response in mitigating trade disruptions, and more robust policy frameworks in emerging markets.

Furthermore, another key driver is the continued surge in investment in the information technology sector—particularly in artificial intelligence. Although manufacturing activity remains subdued, US IT investment has climbed to its highest level since 2001, providing strong support for overall business investment and economic activity. While this growth in IT investment is concentrated in the United States, it also generates positive spillover effects globally, especially in boosting technology exports from Asia.

Prior to the IMF, the World Bank recently released a report expressing a similar view, stating that the resilience of the global economy has been “stronger than expected.” However, the World Bank pointed out that the 2020s are still on track to be the weakest decade for global growth since the 1960s, and this sluggish growth is widening global disparities in living standards: by the end of last year, per capita income in nearly all advanced economies had surpassed 2019 levels, but in about a quarter of developing economies, per capita income remained below 2019 levels.

The IMF report indicates that growth expectations for advanced economies are 1.8% and 1.7% for this year and next, respectively. Due to persistent structural constraints, growth in the Eurozone is projected at 1.3% and 1.4%, with Germany, France, Italy, and Spain at 1.1%, 1.0%, 0.7%, and 2.3%, respectively. Japan’s economic growth is expected to slow from 1.1% in 2025 to 0.7% in 2026 and 0.6% in 2027.

Growth expectations for emerging market and developing economies are 4.2% and 4.1% for this year and next, respectively. India’s growth rates for this year and next are both 6.4%, a significant decline from 7.3% in 2025. The Middle East and Central Asia region is projected to grow at 3.9% and 4.0%, while Sub-Saharan Africa is expected to grow at 4.6% for both years, both accelerating from their 2025 bases. Growth in Latin America is expected to slow slightly to 2.2% this year, with a potential rebound to 2.7% next year. Emerging European economies continue their recovery, with growth rates of 2.3% and 2.4% for this year and next.

The report shows that global trade volume growth is expected to decline from 4.1% in 2025 to 2.6% in 2026, before recovering to 3.1% in 2027. Global inflation is projected to continue declining, reaching 3.8% in 2026 and 3.4% in 2027. The pace of disinflation in the US remains slower than in most economies. Eurozone inflation is expected to fluctuate around 2%, while Indian inflation, after a significant decline in 2025, is expected to return to its target range.

World Economic Outlook

The World Economic Outlook (WEO) is not a physical place or cultural site, but a flagship analytical report published twice a year by the International Monetary Fund (IMF). First introduced in 1980, it provides detailed analysis and forecasts for the global economy, assessing economic policies and prospects for member countries. It serves as a critical resource for policymakers, economists, and financial markets worldwide.

International Monetary Fund (IMF)

The International Monetary Fund (IMF) is an international financial institution established in 1944 at the Bretton Woods Conference to foster global monetary cooperation and financial stability. Its primary roles are to provide policy advice, financial assistance to countries in economic difficulty, and promote sustainable economic growth. Headquartered in Washington, D.C., it is governed by its 190 member countries.

World Bank

The World Bank is an international financial institution founded in 1944 at the Bretton Woods Conference to help rebuild nations after World War II. Today, its primary mission is to provide loans, grants, and expertise to developing countries for projects aimed at reducing poverty and supporting economic development. It is headquartered in Washington, D.C., and consists of five cooperative organizations focused on areas like finance, investment, and dispute resolution.

Eurozone

The Eurozone is not a physical place or cultural site, but an economic and monetary union of 20 European Union member states that have adopted the euro (€) as their common currency. It was officially established in 1999, with the euro first introduced for electronic payments, followed by physical banknotes and coins in 2002, to foster economic integration and stability across Europe. Its history is rooted in the broader project of European integration following World War II, culminating in the Maastricht Treaty of 1992 which set the convergence criteria for membership.

Germany

Germany is a country in Central Europe with a rich and complex history, shaped by the Holy Roman Empire, the Reformation, and its unification in 1871. It is known for its profound cultural contributions, from classical music and philosophy to its many UNESCO World Heritage sites, including medieval castles, cathedrals, and modern Bauhaus architecture. The 20th century was defined by the two World Wars, the division during the Cold War, and its peaceful reunification in 1990, leading to its current role as a leading European economic and political power.

France

France is a Western European nation with a rich and complex history, shaped by Celtic, Roman, and Frankish influences, and it emerged as a major unified kingdom in the Middle Ages. It is globally renowned for its profound cultural contributions, from art and philosophy to cuisine and fashion, and is home to iconic landmarks like the Eiffel Tower in Paris, the Palace of Versailles, and the prehistoric cave paintings of Lascaux.

Italy

Italy is a country in Southern Europe renowned for its profound historical and cultural legacy, being the heart of the ancient Roman Empire and the birthplace of the Renaissance. Its landscape is dotted with iconic sites, from the Colosseum in Rome to the canals of Venice, reflecting over two millennia of art, architecture, and global influence. Today, it remains a major cultural destination, celebrated for its cuisine, fashion, and UNESCO World Heritage sites.

Spain

Spain is a country in southwestern Europe with a rich and layered history shaped by successive civilizations, including the Romans, Visigoths, and Moors, whose nearly 800-year presence left a profound architectural and cultural legacy. Its unification under the Catholic Monarchs in the late 15th century launched a global empire, and today Spain is renowned for its diverse regions, vibrant festivals, and influential contributions to art, cuisine, and language worldwide.