Finance

Global Inflation To Decline To 4.2% In 2025 -IMF

By Sunday Etuka, Abuja

The International Monetary Fund (IMF) has projected global inflation to decline to 4.2% this year and 3.5 percent next year.

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This is even as it projected the global economic growth to remain steady at 3.3 percent this year and next, broadly aligning with the potential growth that has substantially weakened before the pandemic.

The projections were contained in the World Economic Outlook (WEO) released by the IMF on Friday.

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The global body said the forecast for 2025 was broadly unchanged from that in the October 2024 World Economic Outlook (WEO), primarily on account of an upward revision in the United States offsetting downward revisions in other major economies.

It explained that global headline inflation is expected to decline, converging back to target earlier in advanced economies than in emerging market and developing economies.

It said medium-term risks to the baseline are tilted to the downside, while the near-term outlook is characterized by divergent risks.

It said upside risks could lift already-robust growth in the United States in the short run, whereas risks in other countries are on the downside amid elevated policy uncertainty.

It projected that policy-generated disruptions to the ongoing disinflation process could interrupt the pivot to easing monetary policy, with implications for fiscal sustainability and financial stability.

Managing these risks, according to IMF, requires a keen policy focus on balancing trade-offs between inflation and real activity, rebuilding buffers, and lifting medium-term growth prospects through stepped-up structural reforms as well as stronger multilateral rules and cooperation.

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