MNI BRIEF: IMF Ups Japan 2025 GDP To +0.7% From April 0.6%

The International Monetary Fund on Tuesday raised its 2025 growth forecast for Japan’s economy to 0.7%, up from 0.6% in April, but trimmed its 2026 projection to 0.5%, down from 0.6%, according to the latest update of its World Economic Outlook's update.

The IMF also upgraded its global growth forecast to 3.0% for 2025 and 3.1% for 2026, from April’s projections of 2.8% and 3.0%.

The U.S. economy is now expected to grow 1.9% this year and 2.0% in 2026, revised up from 1.8% and 1.7% in the previous outlook. However, the IMF cautioned that risks remain tilted to the downside, warning that “a rebound in effective tariff rates could lead to weaker growth”,  also emphasising the need for country-specific policy responses to maintain price and financial stability amid prolonged trade tensions and evolving tariffs.

The update noted that yield curves have steepened in the context of fiscal concerns but said the trend is not unusual by historical standards, even with elevated debt and deficit levels across many economies. On U.S. fiscal policy, the IMF acknowledged that the passage of the One Big Beautiful Bill Act in July brought near-term clarity but added that “it has added to uncertainty about longer-term fiscal sustainability.”