What it means
The report is produced by the IMF's research staff and is one of its best known publications. The full editions appear twice a year, in spring and autumn, with shorter updates published in between.
Each edition reviews recent developments, projects the next year or two and explores a special topic in analytical chapters. The headline figure is usually the projected growth rate of world output, together with figures for advanced economies, emerging markets and individual countries.
It also gives forecasts for inflation, unemployment, trade volumes and current account balances. Alongside the numbers, it lists the main risks that could push the outlook up or down.
Corporate finance teams use these forecasts as inputs in budgeting and planning. A company that sells in several countries may weight its revenue forecast by the expected growth of each market, or use the report to set currency and interest rate assumptions.
The forecasts also provide a neutral external benchmark for challenging internal assumptions. Forecasts change, and the changes are information in themselves.
When an edition lowers growth for an important market compared with the previous one, it signals that conditions have weakened, and planners may want to revisit their own assumptions. Comparing editions side by side shows the direction of travel.
The nuance is that these are forecasts, which are often revised and sometimes wrong, particularly around turning points like recessions. They rest on assumptions about policy, commodity prices and global events, and they should be used as one input among several rather than as a prediction.
Regional and country detail makes the report more useful than the global headline. Tables list growth, inflation, unemployment and external balances country by country, so a planner can pull out only the markets that matter to the business.
Many treasury teams also read the sections on exchange rates and commodity prices, since these affect import costs and the value of overseas profits.
In practice
Real-world examples.
Example
A retailer building next year's budget compares the report's growth forecasts for its five largest markets. It gives the two weakest markets a more cautious sales target. This keeps targets realistic and stops the budget from relying on markets that are unlikely to grow.
Example
A bank's risk team reads the report's chapter on financial stability and increases its stress test assumptions for emerging market borrowers. The change feeds into expected loan losses, which the bank sets aside as provisions.
Example
A manufacturer notices that the latest edition cuts its forecast for global trade volumes. The finance director asks the sales team to review export forecasts before orders are committed to raw material purchases. Delaying those purchases for a month saves cash and cuts the risk of holding unsold stock.
Formula
Calculation
Forecast revision (percentage points) = latest forecast growth rate - previous forecast growth rate
Suppose an earlier edition projected 3.2% growth for a key market and the latest edition projects 2.7%. Revision = 2.7 - 3.2 = -0.5 percentage points. A company expecting $80,000,000 of sales from that market, which it had budgeted to grow in line with 3.2%, might trim its growth assumption. At 3.2% the sales are 80,000,000 x 1.032 = $82,560,000, and at 2.7% they are 80,000,000 x 1.027 = $82,160,000, a difference of $400,000.Case study
Seen in the real world.
Meridian Components is an illustrative, fictional machinery maker that exports to 20 countries. When preparing its annual budget, the finance team compared its internal sales forecast with the growth outlook published by the IMF.
They found that its plan assumed 6% sales growth in a region where the report projected only 2% economic growth. The CFO did not discard the plan, but she asked sales leaders to explain what would let the company outgrow its market by four percentage points.
The answer was a new product launch, which was credible for one product line but not for the others. The team trimmed the overall sales growth to 4.5%, and in this illustrative case that avoided overspending on production capacity that would have sat idle.
Watch out
Common mistakes.
- Treating the forecasts as certain, when they are revised regularly and carry wide uncertainty.
- Quoting a figure without stating which edition it comes from, so different people use different numbers.
- Using world growth to plan a company's sales without adjusting for the specific markets, products and competitors involved.
Questions
People also ask.
How often is the report published?
A full edition appears twice a year, with shorter updates between, though the exact dates may change. The release schedule is announced in advance on the IMF website.
Who writes it?
It is prepared by the research staff of the International Monetary Fund, using data from member countries and its own analysis. Its forecasts are compared with those of other bodies, such as central banks and private forecasters.
Is the report free to use?
The IMF makes its reports and data available publicly, but users should check its terms when reproducing material. Quoting the edition and table number makes it easy for readers to check the figure.
From the founder's library
Take it further with the book.
Build your financial confidence beyond this definition. Shihan's full-length guide, Accounting Fundamentals, takes the same plain-English approach and turns it into a complete, practical playbook for non-finance managers, business owners and students - with chapter-end quiz answers and presentation slides included.
25% off with code MMHQ25, applied at checkout. Priced in USD - checkout may show the equivalent in your local currency.
View the book and save 25%Related