Page 10 - Policy Economic Report - October 2025

POLICY AND ECONOMIC REPORT
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the United Kingdom and the United States. In the United Kingdom, headline inflation, which started
picking up in 2024, is expected to continue rising in 2025 partly because of changes in regulated prices.

In the United States, inflation is expected to pick up beginning in the second half of 2025, as the impact
of tariffs is no longer absorbed within supply chains and instead passed on to consumers. Inflation then
is expected to return to the Federal Reserve’s 2 percent target during 2027.

Among emerging market and developing economies, inflation forecasts for Brazil and Mexico are revised
upward. For Brazil, the revision is more pronounced and in part reflects the stabilization of inflation
expectations above target rates.

Figure 3: Global inflation trends

Source- IMF

Global Trade

According to IMF, trade volume growth is projected at an average rate of 2.9 percent in 2025–26, even
with the temporary boost from front-loading in 2025, is lower than projected in the October 2024 WEO,
which envisioned an average growth rate of 3.3 percent.

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