Take Two: IMF raises global growth forecast; Eurozone core inflation revised up

What do you need to know? 

The International Monetary Fund (IMF) raised its 2025 global growth forecast to 3.2% from the 3.0% it projected in July, though it said “unexpected resilience” against higher US tariffs reflected temporary factors like front-loading trade and investment, which are now starting to fade. Overall growth prospects “remain dim” due to greater protectionism and fragmentation, it said. The IMF kept its 2026 forecast unchanged at 3.1%; both projections represent a deceleration from 2024’s 3.3% growth. Separately, it warned that global government debt is expected to rise above 100% of GDP by 2029, its highest level since 1948.

Around the world

Eurozone inflation was confirmed at 2.2% in September, up from 2.0% in August, though core inflation - excluding energy, food, alcohol and tobacco - was revised up to 2.4% from the flash estimate of 2.3%. Elsewhere, China deflation eased slightly in September as the consumer price index (CPI) fell 0.3% on an annual basis, slightly less than the 0.4% drop the previous month. Core inflation, excluding food and energy, rose 1.0%, its highest level in 19 months. China’s exports hit a six-month high, up 8.3% year on year after a 4.4% rise in August, though exports to the US fell 27%. 

Figure in focus: $3trn

The global payments industry generated $2.5trn in revenue from 3.6 trillion transactions last year, with the market expected to reach $3trn by 2029, according to a report from the consultancy McKinsey. Global payments revenue growth slowed to 4% in 2024 from 12% in 2023, in part due to higher interest rates and a more muted macroeconomic environment, as well as changes in the type of payment methods customers are using, it said. Cash was used in less than half of transactions worldwide at 46% in 2024, down from 50% the year before, with account-to-account payments and digital wallets gaining in popularity.

Words of wisdom

Positive Tipping Point: A critical threshold where social, technological and ecological changes trigger self-propelling transformations towards more sustainable states. Some positive tipping points have already been crossed, such as the adoption of solar and wind power and electric vehicles, according to the latest Global Tipping Points report from a group of 160 scientists across 23 countries. However, the report also warned the planet’s first catastrophic tipping point has been reached, with rising ocean temperatures and pollution damaging coral reefs, which could harm marine biodiversity and weaken coastal defences.  

What’s coming up?

China’s Communist Party holds its Fourth Plenum from Monday to Thursday where it will discuss the next five-year plan. Meanwhile on Monday, China issues its GDP growth rate for the third quarter (Q3); its economy expanded 5.2% in Q2. Canada publishes inflation data on Tuesday, followed by the UK on Wednesday and the US and Japan on Friday. Several flash Purchasing Managers’ Indices are issued on Friday, including those covering Japan, the Eurozone, UK and US.