IMF Projects Modest Growth Amid Persistent Trade Uncertainty

The IMF released its mid-2025 forecasts on July 10, projecting moderate growth in the euro area through 2027. Durable unemployment and stable inflation were welcomed, but growth is likely to face headwinds from global policy uncertainty and fractured supply chains.

The IMF report underlined the impact of trade fragmentation and geopolitical friction on investment and trade flows. While fiscal support and infrastructure spending may cushion the impact, policymakers were urged to proceed with vigilance, particularly around debt and financial stability.

For financial markets, the report highlights a gradual growth environment, making fixed-income and non-cyclical equity themes compelling. At the same time, policymakers and investors alike are preparing for extended policy uncertainty and shifting global trade dynamics.