The International Monetary Fund (IMF) projected that global inflation will decrease from 5.8% this year to 4.3% by 2025.

In its report released on Oct. 22, the IMF highlighted that inflation in wealthy countries is expected to fall more quickly, from 2.6% this year to 2% in 2025, aligning with the targets of major central banks.

After a prolonged period of price increases following the pandemic, the Federal Reserve and the European Central Bank cut interest rates this year after previously raising them to control inflation.

“The battle against inflation is almost won,” IMF Chief Economist Pierre-Olivier Gourinchas said to reporters on Oct. 22. “In most countries, inflation is hovering close to central bank targets.”

In addition to its inflation outlook, the IMF upgraded its 2024 economic projections for the U.S. while lowering growth estimates for Europe and China, keeping its global growth forecast at 3.2% for 2024.

However, the IMF anticipates a slowdown in the U.S. economy, predicting growth will decelerate to 2.2% in 2025. With a new presidential administration and Congress, the IMF foresees the U.S. job market losing some momentum as the government seeks to address significant budget deficits through spending cuts and tax increases.

Other Economic Highlights:

• China’s growth is projected to slow from 4.8% this year to 4.5% in 2025
• The 20 European countries that use the Euro are expected to grow by 0.8% this year, doubling the 0.4% expansion seen in 2023
• Germany is expected to see minimal growth this year
• India’s economy is forecasted to grow by 7% this year and 6.5% in 2025
• Japan is expected to grow by 0.3% this year, accelerating to 1.1% in 2025
• The U.K. is projected to grow by 1.1% this year, up from 0.3% in 2023

To read the IMF transcript, click here.