An economic forecast is an estimate of the economy’s future performance. It includes a broad set of information about the economy and its participants. It is often based on standard statistical techniques. However, it is also shaped by the judgments of forecasters. This judgment may be rooted in experience and understanding or it may reflect unconscious bias. In any case, it must be stated explicitly so that anyone who reads the forecast can understand what parts of the overall conclusion follow from judgment and which are derived from more objective analysis.

In the baseline forecast, global growth is projected to slow down this year as rising trade barriers and heightened policy uncertainty weigh on activity. But a resolution of trade tensions, less severe financial sector stress, and lower-than-expected oil prices would lift growth, along with greater private investment and less costly natural disasters.

The outlook for the world’s major advanced economies is a bit brighter, with growth stabilizing at 2.4% in 2025 and 2.0% in 2026-27. A resumption of investment, especially in technology, could support stronger-than-expected productivity gains and help offset weaker household spending and tepid wage growth. But these hopes are tempered by downside risks, including the possibility that escalating trade barriers will undermine growth, or that global financial conditions deteriorate further, or that armed conflicts flare up again. In this environment, it is crucial that multilateral policy efforts promote a transparent and stable international economic environment.