Last week, the International Monetary Fund released their January forecast report, painting a picture mostly in line with their earlier update in October.

The world economy is now pegged to grow at 3.3% in 2025 (up slightly from 3.2% in the October outlook) and 2026 (unchanged from earlier). The minor upward revision for this year is driven mostly by a more upbeat outlook for the U.S. economy. 

Despite the improvement, global output is expected to remain underwhelmingly below the historical (2000-2019) average of 3.7% experienced prior to COVID, and is holding near the estimated 3.2% pace set last year.

Momentum from a stronger-than-expected performance by the U.S. in 2024 will carry into this year with 2.7% annual GDP growth (a 0.5 percentage point improvement over the October forecast). Growth is, however, expected to slow closer to potential of 2.1% in 2026.

Closer to home, the IMF expects the Canadian economy to grow by 2% this year (a downgrade from their earlier estimate of 2.4%, and largely in line with our latest forecast of 1.7%). Growth in 2026 is also pegged at 2%.

The Euro Area is poised to rise by only 1.0% in 2025 with heightened political uncertainty before picking up to 1.4% in 2026.

Meanwhile, ongoing property woes and eroding consumer sentiment are expected to weigh on China’s economy, which is pegged to grow by only 4.6% this year (down from estimated growth of 4.8% in 2024).

The IMF also expects oil prices to soften this year due to weakened demand conditions in China and rising crude supply from non-OPEC+ countries, also in line with our latest outlook.

While the IMF has improved their world outlook slightly, the Washington-based agency warns that the protectionist policies currently on the horizon pose a significant downside risk to the global economy.

Answer to the previous trivia question: Grant MacEwan College and Mount Royal College became universities in 2009.

Today’s trivia question: In what year did Athabasca University achieve self-governing status as a public university?