The International Monetary Fund has raised its Gross Domestic Product (GDP) growth forecast for emerging and developing economies to 4.1%, up from 3.7% in April. This change comes on the back of a stronger China GDP 2025 outlook and improving trade ties between the U.S. and China. China’s estimated growth now stands at 4.8%, up from 4.0%, thanks to better-than-expected performance early this year. Overall, global growth is forecast at 3.0% in 2025 and 3.1% in 2026.
The more positive emerging markets GDP forecast has boosted investor confidence. India is projected to lead major economies with 6.4% growth in 2025, helped by strong domestic demand and reforms. Indonesia’s economy is projected to grow by 4.7% in 2025, according to the International Monetary Fund’s (IMF) latest forecast. Commodity-exporting countries are also benefiting from a weaker U.S. dollar and easing global financial conditions.
Emerging Markets GDP Forecast Signals Renewed Momentum
The IMF revised its 2025 GDP growth forecast based on multiple factors—according to the IMF, the upward revision reflects front-loaded trade activities, improved liquidity conditions, and a weaker U.S. dollar that eased global financial conditions. These shifts created room for faster growth in China and other emerging markets.
While the updated emerging markets GDP forecast brought a positive market reaction, the IMF warned about possible risks. These include future tariff changes, public debt pressures, and central bank challenges. The IMF Indonesia GDP growth forecast 2025 reflects these concerns, showing that policy decisions will play a major role going forward.
China remains central to the rebound. The China GDP 2025 outlook received the largest upgrade of any major economy. This was due to strong export growth to Southeast Asia and Europe, helping to offset weaker early-year demand from the U.S.
The IMF’s revised 2025 GDP growth forecast shows emerging economies are on a steadier recovery path. Policymakers still need to be cautious and ready to act. Trade decisions, inflation control, and public trust in financial systems will shape how well this progress holds.
