World Economic Outlook, October 2025: Global Economy in Flux, Prospects Remain Dim
World Economic Outlook, October 2025
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- World Economic Outlook, October 2025: Global Economy in Flux, Prospects Remain Dim
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Bibliographic details
- Published: October 14, 2025
Global outlook and headline projections
- Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026.
- Advanced economies are projected to grow around 1.5 percent.
- Emerging market and developing economies are projected to grow just above 4 percent.
- Global headline inflation is expected to decline further, though it will remain above target in the United States—with risks tilted to the upside—and be subdued elsewhere.
- Near-term forecast is revised up modestly relative to the April 2025 WEO but remains a downward revision relative to pre-policy-shift forecasts.
- Temporary factors that supported activity in the first half of 2025—such as front-loading—are fading.
Key risks to the outlook
- Risks are tilted to the downside.
- Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth.
- Fiscal vulnerabilities and potential financial market corrections could threaten stability.
- Erosion of institutions and pressure on the independence of key economic institutions could undermine sound economic decision making.
- An abrupt repricing of tech stocks could threaten macrofinancial stability.
- Larger-than-expected shocks to labor supply could reduce growth, especially in economies facing aging populations and skill shortages.
- Rising borrowing costs and increased rollover risks for sovereigns could interact with fiscal and financial fragilities.
Policy guidance and cross-cutting recommendations
- Policymakers are urged to restore confidence through credible, transparent, and sustainable policies.
- Trade diplomacy should be paired with macroeconomic adjustment.
- Fiscal buffers should be rebuilt.
- Central bank independence should be preserved.
- Efforts on structural reforms should be redoubled.
- Stronger policy frameworks enhance the implementation and credibility of monetary and fiscal policies.
Chapter highlights
- Chapter 1: Global Prospects and Policies
- Global growth is projected to slow and growth prospects remain dim as the world adjusts to a landscape marked by greater protectionism and fragmentation.
- Risks to the outlook are tilted to the downside.
- To navigate a global economy in flux, policymakers should restore confidence through credible, transparent, and sustainable policies.
- Chapter 2: Emerging Market Resilience: Good Luck or Good Policies?
- Emerging markets have shown remarkable resilience to risk-off shocks in recent years.
- Favorable external conditions—good luck—contributed to this resilience, while improvements in policy frameworks—good policies—played a critical role.
- Improvements in monetary and fiscal policy implementation and credibility have reduced reliance on foreign exchange interventions.
- Countries with robust frameworks face easier policy trade-offs and are better positioned to navigate risk-off episodes.
- Economies with weaker frameworks risk de-anchoring inflation expectations and larger output losses if monetary tightening is delayed; costly foreign exchange interventions offer only temporary relief in these settings.
- Chapter 3: Industrial Policy: Managing Trade-Offs to Promote Growth and Resilience
- Countries are increasingly using industrial policy to support strategic sectors and firms, motivated by boosting productivity, reducing reliance on imports, and enhancing resilience.
- Industrial policies can help jump-start domestic industries, but efficacy is sensitive to sector-specific characteristics that are hard to determine in advance.
- Trade-offs of industrial policy include: higher consumer prices for a prolonged period from onshoring; substantial fiscal cost at a time of elevated debt and constrained public finances; negative cross-sector spillovers; and reduced overall productivity by drawing resources inefficiently away from non-targeted sectors.
- Effective industrial policy requires careful targeting and implementation, strong institutions, complementary structural reforms, and sound macroeconomic policy.
Source: World Economic Outlook, October 2025: Global Economy in Flux, Prospects Remain Dim
Content in this bundle
- Chapter 1 Data
- Chapter 2 Data
- Chapter 3 Data
- Chapter 1
- Chapter 1 Online Annex
- Chapter 2
- ch2onlineannexes
- CHAPTER 3 INDUSTRIAL POLICY: MANAGING TRADE-OFFS TO PROMOTE GROWTH AND RESILIENCE
- Ch3onlineannexes
- Commodity Special Feature
- Executive Summary
- Foreword
- Statistical Appendix
- Table a
- Table b
- Full Report