The IMF Annual Report 2025 presents a comprehensive assessment of the global economic landscape marked by exceptional uncertainty, driven by rising geopolitical tensions, policy divergence, AI-driven technological shifts, climate-related shocks, and structural changes in international trade. Despite global resilience in recent years, growth remains subdued, and macroeconomic risks are intensifying—particularly for low-income and emerging economies.

1. Global Economic Outlook: Low Growth, High Uncertainty

• Global growth remains weak, with medium-term projections around 3%, significantly below long-term averages.
• Inflation is declining but uneven, prompting diverging monetary policies across major economies.
• Trade tensions, industrial policies, and market volatility continue to reshape global trade flows.
• Climate-related disasters and geopolitical shocks are amplifying macroeconomic instability.

2. Growth Priorities: Stability, Reform, and International Cooperation

To unlock durable growth, the IMF emphasizes:

• Strengthening domestic resilience through credible fiscal and monetary frameworks.
• Deep structural reforms to enhance productivity: cutting red tape, improving competition, enabling entrepreneurship, and expanding digital capacity.
• Developing deeper capital markets, modern tax systems, and supportive business environments.
• Investing in innovation, infrastructure, and digital transformation, particularly in AI-driven growth opportunities.
• International coordination to reduce trade tensions, manage spillovers, and advance debt restructuring.

3. Rising Public Debt & Fiscal Pressures

• Global public debt exceeded $100 trillion in 2024, projected to approach 100% of global GDP.
• Debt servicing costs are rising, crowding out critical development and climate-related investment.
• Over 50% of low-income developing countries are at high risk of debt distress.
• The IMF calls for:
  • Growth-oriented fiscal consolidation,
  • Reform of pensions, subsidies, and expenditure frameworks,
  • Strong revenue mobilisation, especially in emerging economies,
  • Timely and transparent debt restructuring, supported by the Global Sovereign Debt Roundtable.

4. Financial Stability Risks Intensify

Risks to financial stability increased due to:

• Tight global financial conditions and valuation risks in overconcentrated capital markets.
• Rising leverage among non-bank financial institutions increases systemic vulnerability.
• The intensifying sovereign-bank nexus, especially in emerging and low-income economies.
• The IMF stresses:
  • Strengthened financial supervision,
  • Robust market infrastructure,
  • Enhanced use of stress testing and scenario analysis,
  • Greater focus on non-bank financial oversight,
  • Firm implementation of Basel III.

5. IMF Support to Member Countries

In FY2025, the IMF continued to deliver:

• 133 economic surveillance assessments, providing country-tailored policy guidance.
• $63 billion in lending, including support to low-income countries through the Poverty Reduction and Growth Trust (PRGT).
• $382 million in capacity development to strengthen institutions such as central banks, revenue authorities, and financial supervisors.

Key reforms include:

• Reduced borrowing costs through updated Charges and Surcharge Policy, saving members $1.2 billion annually.
• Enhanced support to low-income countries via PRGT reforms, including a new tiered interest rate system.
• Continued expansion of the Resilience and Sustainability Trust (RST) to address climate and pandemic preparedness challenges.

6. The IMF at 80: Adapting for a New Era

The IMF underscores its commitment to:

• Safeguarding global monetary cooperation,
• Supporting members’ policy reform and crisis response,
• Promoting inclusive growth and protecting vulnerable populations,
• Strengthening multilateral dialogue in an era of fragmentation.

As countries navigate volatility and structural transformation, the Fund reiterates that clarity, commitment, and international coordination are essential for building a more stable, resilient, and prosperous global economic future.

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