The IMF upgrades global growth forecast: The International Monetary Fund (IMF) now forecasts global growth to reach 3.2% in 2025, a 0.2 percentage point upgrade from its July estimates, it said in its latest World Economic Outlook report (pdf). The fund expects growth to ease further to 3.1% in 2026, unchanged from the previous forecast.

Behind the steady outlook: The IMF said global activity has held up better than expected despite trade policy shifts, supported by lower-than-expected tariff rates, an agile private sector that front-loaded imports and rerouted supply chains, a weaker dollar, fiscal stimulus in Europe and China, and an AI-driven investment boom. “So bottom line: not as bad as we feared, but worse than we anticipated a year ago, and worse than we need,” Reuters quotes the IMF chief economist Pierre-Olivier Gourinchas as saying earlier this week.

MENA gets an upgrade: The MENA region is expected to log a 3.3% growth this year, a 0.1 percentage point upgrade from July projections. Growth is set to accelerate next year to 3.7%, a 0.3 point upgrade. The IMF cited Saudi Arabia’s fast-than-anticipated oil production hikes and Egypt’s better-than-expected outrun in the first half of the year as the main drivers of the upgrade.

Major economies saw mixed revisions: The IMF now expects the US to grow 2.0% in 2025, a 0.1 percentage point upgrade from its July forecast, while Japan’s 2025 growth got an upgrade by 0.4 percentage point to 1.1%. Meanwhile, the fund lowered its forecast for Canada’s growth by 0.4 percentage point to 1.2%, and for the UK by 0.1 percentage point to 1.3%.

China and India also see stronger outlooks: China’s 2025 outlook stayed unchanged at 4.8% on the back of increased exports that the IMF says were unsustainable, pointing at the country’s contracting real estate sector pushing its economy to “the edge of debt-deflation trap,” Gourinchas noted. Meanwhile, India’s growth forecast rose by 0.2 percentage points to 6.6% for 2025, while the 2026 growth outlook got a downward revision to 6.2%, from earlier forecasts of 6.4%.

Across the Atlantic: Growth in the Eurozone is now projected at 1.2% in 2025, an upward revision of 0.2 percentage points from July, buoyed by Germany’s fiscal expansion and Spain’s growing momentum. The IMF expects the area’s growth to reach 1.1% in 2026, down from 1.2% in the previous forecast.

Trade remains a swing factor: The fund projects global trade volumes to grow 3.6% in 2025,, driven by front-loaded shipments ahead of tariff hikes. This front-loading effect will likely carry over into 2026, with trade growth forecast to rise to 2.3% — 0.4 percentage point higher than the previous projection.

AI bubble is a major downside risk: Growing investments in AI echo the dot-com boom of the late 1990s, Gourinchas said in a blogpost. ”Markets could reprice sharply, especially if AI fails to justify lofty profit expectations. That would dent wealth and curb consumption, with adverse effects potentially reverberating through the financial system,” Gourinchas added.

The inflation outlook: Global headline inflation is forecasted to decline to 4.2% in 2025 and 3.7% in 2026, “virtually unchanged” from July’s or April’s projections. Inflation is expected to remain above target in the US, while easing in Europe and Asia, indicating lower growth performances.

MARKETS THIS MORNING-

Asian markets are inching higher this morning, as Hong Kong’s Hang Seng is up 1.6% in early trading, while Japan’s Nikkei is up 1.3% and the Shanghai Composite is up 0.4%. Meanwhile, Wall Street futures are subdued following a volatile session fueled by US-China trade concerns.

ADX

10,111

+0.1% (YTD: +7.3%)

DFM

6,033

+1.4% (YTD: +16.9%)

Nasdaq Dubai UAE20

4,886

+1.0% (YTD: +17.3%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

3.9% o/n

3.9% 1 yr

TASI

11,596

0.0% (YTD: -3.7%)

EGX30

37,459

+0.1% (YTD: +26.0%)

S&P 500

6,644

-0.2% (YTD: +13.0%)

FTSE 100

9,453

+0.1% (YTD: +15.7%)

Euro Stoxx 50

5,552

-0.3% (YTD: +13.4%)

Brent crude

USD 62.28

-1.6%

Natural gas (Nymex)

USD 3.01

-0.6%

Gold

USD 4,178

+0.4%

BTC

USD 113,327

-1.9% (YTD: +21.3%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.75

0.0% (YTD: +7.7%)

S&P MENA Bond & Sukuk

151.00

0.0% (YTD: +7.9%)

VIX (Volatility Index)

20.81

+9.4% (YTD: +19.9%)

THE CLOSING BELL-

The ADX rose 0.1% yesterday on turnover of AED 1.3 bn. The index is up 7.3% YTD.

In the green: Gulf Cement Co. (+3.2%), National Corporation for Tourism & Hotels (+2.6%) and Burjeel Holdings (+2.3%).

In the red: Al Khaleej Investment (-7.8%), National Bank of Umm Al Qaiwain (-5.2%) and Umm Al Qaiwain General Investment Co. (-4.7%).

Over on the DFM, the index rose 1.4% on turnover of AED 741.6 mn. Meanwhile, Nasdaq Dubai was up 1.0%.

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