Türkiye to maintain steady growth, while Trump risks global inflation in 2025: IMF

Türkiye’s economy maintains projections in October 2024, signaling steady growth ahead with 2.6% in 2025, followed by an acceleration to 3.2% in 2026, the International Monetary Fund’s (IMF) report indicated.

On the other hand, the report underlined global policy uncertainties, especially pointing out U.S, as President-elect Donald Trump’s pledged measures might pose a potential risk for global inflation.

Global growth forecast improved

IMF’s World Economic Outlook update in January 2025 was released on Friday, which anticipated global growth to inch upward to 3.3% for 2025, slightly above the previous forecast in October 2024, though it remains below pre-pandemic levels.

IMF Chief Economist Pierre-Olivier Gourinchas characterized this trend as “steady,” while emphasizing it lags behind the average global growth rate of 3.7% recorded in the early 21st century. Inflation, meanwhile, is expected to moderate, with global rates falling to 4.2% this year and 3.5% by 2026, as price stabilization occurs faster in advanced economies than in emerging markets.

Trump’s policies would risk global inflation

U.S. has emerged as a standout performer among advanced economies, with its resilience prompting the IMF to revise its 2025 growth forecast upward to 2.7%, followed by 2.1% in 2026. Strong private demand, robust labor markets, and consumer confidence are driving the country’s growth.

However, risks loom on the horizon as Donald Trump prepares to return to the White House. The IMF has flagged concerns about potential inflationary pressures stemming from policy uncertainty under the incoming administration. Its projections are based on existing policies and do not account for Trump’s proposed economic measures, which Gourinchas warned could present “an upside risk on inflation.”

Economic turmoil in eurozone resists

In contrast, the eurozone continues to face headwinds, with the IMF forecasting growth of just 1.0% this year and 1.4% in 2026. A sharp downgrade for Germany has tempered hopes for a significant rebound.

Gourinchas attributed this divergence between the U.S. and Europe to structural factors, including stronger productivity growth and a more favorable business environment in the U.S., particularly in the technology sector.

Elsewhere, the IMF’s outlook for Japan remains stable, while the United Kingdom’s growth prospects for 2025 have been revised slightly upward. Russia’s economic growth, however, is expected to slow considerably, from 3.8% in 2024 to 1.4% this year, as the conflict in Ukraine continues to take a toll.

China to slowdown, while India to take the lead

China, the world’s second-largest economy, is forecast to grow by 4.6% this year, buoyed by recent fiscal stimulus measures aimed at countering a property market slump. However, the IMF notes that the cooling of China’s economy signals a broader rebalancing among emerging markets. India is emerging as a key driver, with projected growth of 6.5% for both 2025 and 2026.

Growth across the Middle East and Central Asia is expected to rise more slowly than previously forecast, primarily due to oil production cuts by OPEC+ nations. On the other hand, economic activity in Latin America and sub-Saharan Africa is anticipated to accelerate, providing a glimmer of optimism for these regions.