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  3. Indian economy likely to be ‘a little weaker’ in 2025 despite steady global growth: IMF MD

Indian economy likely to be ‘a little weaker’ in 2025 despite steady global growth: IMF MD

13 Jan 2025 Evaluate

Expressing cautiousness over India’s economy, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva has said the Indian economy is expected to be ‘a little weaker’ in 2025 despite steady global growth. Georgieva also said she expects quite a lot of uncertainty in the world this year mainly around the trade policy of the US. She said global growth is expected to be steady in 2025, but with regional divergence. She said ‘the US is doing quite a bit better than we expected before, the EU is somewhat stalling, (and) India a little weaker’. Brazil was facing somewhat higher inflation. In China, the world's second-largest economy, IMF was seeing deflationary pressure and ongoing challenges with domestic demand.

She said ‘Low-income countries, despite all the efforts they are making, are in a position when any new shock can affect them quite negatively’. She added ‘What we expect in 2025 is to have quite a lot of uncertainty, especially in terms of economic policies. Not surprisingly, given the size and role of the US economy, there is keen interest globally in the policy directions of the incoming administration, in particular on tariffs, taxes, deregulation and government efficiency’.

She further said this uncertainty is particularly high around the path for trade policy going forward, adding to the headwinds facing the global economy, especially for countries and regions that are more integrated in global supply chains, medium-sized economies, (and) Asia as a region. That uncertainty is actually expressed globally through higher long-term interest rates, even though short-term interest rates have gone down.


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