IMF Projects Global Growth To Remain Steady At 3.3 Percent For 2025 Amid Economic Challenges

The International Monetary Fund (IMF) anticipates global growth to maintain a rate of 3.3% this year and next, before slowing to just above 3% over the next five years. This is notably below the historical average. Kristalina Georgieva, IMF Managing Director, mentioned that growth in the Middle East and North Africa is expected to recover to approximately 3.6% by 2025, driven by increased oil production and reduced regional conflicts.

Georgieva highlighted that policymakers have largely succeeded in controlling inflation, though it remains a concern in some countries. This could result in varying interest rates across nations and increased borrowing costs for emerging markets and developing economies. She shared these insights at the 9th Arab Fiscal Forum during the World Governments Summit 2025 preliminary day in Dubai.

She also warned about global public debt, which is projected to reach 100% of global GDP by 2030. Many countries in the region face similar challenges, with debt levels surpassing 70% of GDP. This situation risks trapping them in a low-growth, high-debt cycle.

Governments are confronted with several challenges, including job creation, enhancing social safety nets, adapting to national security needs, building resilience against natural disasters, and supporting economic diversification. Georgieva noted that digital innovation, particularly AI technologies, is expected to significantly boost UAE's GDP by 2030. Increased R&D spending will further enhance productivity.

Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, pointed out disparities in growth rates between emerging economies and middle-income countries. Some are experiencing significant slowdowns due to financial and geopolitical pressures.

IMF's Role in Supporting Growth

Azour emphasised the IMF's ongoing role in providing financial and technical support to developing nations. The organisation aims to strengthen structural reforms to promote sustainable growth.

The IMF's projections highlight both opportunities and challenges for global economies. While some regions may experience recovery due to factors like increased oil production, others face hurdles such as rising debt levels and inflationary pressures.

With inputs from WAM