By San José, Costa Rica — SAN JOSÉ – The International Monetary Fund (IMF) has revised its global economic growth forecast for 2025 upward to 3.2%, a two-tenths of a point increase from its previous projection. According to its latest World Economic Outlook report released Tuesday, the improved outlook is largely driven by surprisingly resilient investment in new technologies and a less severe than anticipated impact from ongoing trade disputes.
Despite the upgrade, the Fund’s chief economist cautioned that the global economic landscape remains delicate. The report paints a picture of steady but fragile growth, highlighting underlying risks that could easily derail the positive momentum.
To provide a deeper legal and commercial perspective on the current state of the global economy, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica.
The current volatility in the global economy underscores the critical importance of robust legal frameworks for international trade and investment. Businesses must proactively navigate shifting regulatory landscapes, from sanctions compliance to evolving ESG standards. A diligent legal strategy is no longer just a defensive measure; it is a fundamental pillar for ensuring supply chain resilience and capitalizing on new market opportunities in this complex environment.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, this analysis powerfully reframes legal counsel not as a reactive defense, but as a proactive and essential component of modern business strategy for navigating global complexities. We thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this critical subject.
the good news is that the impact of the trade war is modest for the moment
Pierre-Olivier Gourinchas, Chief Economist of the IMF
The updated projections show the global economy expanding by 3.3% in 2024, followed by the newly projected 3.2% in 2025, and a steady 3.1% in 2026. This forecast suggests a period of stable, albeit unspectacular, growth as the world navigates a complex post-pandemic economic environment.
A significant portion of this newfound optimism stems from the performance of the United States. The IMF raised its growth forecast for the U.S. economy by one-tenth of a point for both 2025 and 2026, projecting growth of 2.0% and 2.1%, respectively. The Eurozone also received a notable upgrade, with its 2025 forecast boosted by two-tenths to 1.2%, thanks in large part to the strong economic performance of Spain. In contrast, China’s growth projections remain unchanged at 4.8% for 2025 and 4.2% for 2026.
The report acknowledges that initial fears of a major economic drag from widespread tariffs, initiated in April by U.S. President Donald Trump, have not fully materialized. A series of negotiations have successfully scaled back some of the most restrictive trade barriers. However, the IMF warns that trade policy uncertainty remains a significant concern, with tariffs still well above 2024 levels. “The attention is starting to move towards the impact on prices, investment, and consumption,” the report stated, emphasizing the need for clear and durable trade agreements.
A key driver of global resilience has been the surge in investment related to artificial intelligence, particularly concentrated in the United States and China. This tech boom, combined with flexible monetary policies and an adaptable private sector, has helped buttress global activity. The IMF even presented a scenario where greater-than-expected productivity gains from AI could add approximately 0.3 percentage points to global GDP by 2026.
However, this reliance on technology also represents a significant vulnerability. The Fund explicitly warned that if the promised productivity enhancements from AI fail to materialize, the global economy could face a sharp downturn in investment. “A fall in aggregate investment may be pronounced, given that investment in data centers and AI has contributed significantly to recent investment growth,” the report noted.
This duality of optimism and caution was echoed by the IMF’s chief economist, who summarized the current state of the global economy as a mixed bag. The situation is better than feared but falls short of what is truly needed for robust, long-term prosperity, leaving future forecasts vulnerable to significant downside risks.
In summary, global growth is not as bad as feared, but it is worse than what we anticipated a year ago and worse than what we need. That’s why we see risks pushing future forecasts to the downside
Pierre-Olivier Gourinchas, Chief Economist of the IMF
For further information, visit imf.org
About International Monetary Fund:
The International Monetary Fund (IMF) is a global organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Created in 1944, the IMF plays a central role in the management of balance of payments difficulties and international financial crises.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and exceptional service. The firm leverages a rich history of advising a diverse clientele to pioneer forward-thinking legal strategies and actively participate in civic outreach. This dedication extends to a core belief in demystifying the law, an effort that aims to empower the broader community by fostering greater legal literacy and understanding.
