Global Economic Outlook

The International Monetary Fund (IMF) has updated its world economic outlook, projecting a global growth of 3.3% in both 2025 and 2026, a slight increase from the 3.2% forecast in the October report. This optimistic outlook is driven by several key factors across major economies.

Country-Specific Growth Projections

The United States is expected to see a growth of 2.7% in 2025, up by 0.5 percentage points from previous estimates. China's economy is forecasted to grow by 4.6%, marking a 0.1 percentage point increase. Conversely, the Eurozone is anticipated to grow by 1%, a decrease of 0.2 percentage points from earlier projections.

Inflation Trends

Inflation rates are projected to decline, with an average of 4.2% expected this year, further dropping to 3.5% by 2026. This trend suggests a return to target inflation levels sooner in developed economies.

Risks and Adjustments

While near-term risks in the US are skewed positively due to potential policy measures from the Trump administration, such as tax cuts, the IMF warns of possible long-term fiscal adjustments. These adjustments could disrupt markets and the economy, potentially undermining the role of US Treasuries as a global safe asset.