Development Committee: The Managing Director's Written Statement

Policy Papers, April 24, 2025

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Based on information available as of April 4, 2025, global growth is projected to fall significantly.
Headline inflation is expected to further decline, though at a slightly slower pace than expected earlier.
The economic outlook is highly uncertain, with intensifying downside risks driven by shifting policy priorities by major economies and escalating trade tensions.
Major structural forces are reshaping the economic landscape amid high public debt and weak medium-term growth prospects.

Many LIDCs face the added challenge of collapsing aid flows.
Aggregate growth in LIDCs is expected to further improve, while the rate of per capita growth is projected to decline in 2025-26.
Of the 20 fastest growing countries in the world in 2024, around half were LIDCs.
Many poorer LIDCs have seen virtually no progress in per capita incomes over the past 15 years.

Intensifying downside risks amid elevated uncertainty and frequent shocks call for policy emphasis on stability and resilience.
Key vulnerabilities highlighted: high public debt, weak medium-term growth potential, and escalating trade tensions.
Internal and external macroeconomic imbalances should be renewed priorities to enhance stability internally, externally, and globally.

Prioritize policies that enhance economic and financial stability.
Rebuild fiscal and financial buffers to improve resilience to shocks.
Implement measures to improve growth potential, including structural reforms.
Renew focus on addressing internal and external macroeconomic imbalances.
Strengthen multilateral cooperation to deliver sustained growth and meet global challenges.

The statement emphasizes the interplay of shifting policy priorities in major economies, trade tensions, high public debt, weak medium-term prospects, and transformative forces reshaping economies.
Multilateral cooperation is underscored as essential for delivering sustained growth and addressing global challenges.

International Monetary Fund. "Development Committee: The Managing Director's Written Statement", Policy Papers 2025, 011 (2025), April 24, 2025.