The Indian economy is predicted to face challenges in 2025, even as global growth is expected to remain steady, according to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF). Speaking at her annual media briefing, Georgieva noted that while the global outlook appears stable, regional disparities are evident. India, she said, is likely to experience a “little weaker” growth, though she refrained from elaborating further. A detailed analysis is expected in the IMF’s World Economic Outlook update next week.
Globally, economies are moving at different paces. The United States is performing better than anticipated, while the European Union is slowing down. China, the world’s second-largest economy, is grappling with deflation and weak domestic demand. In Brazil, inflation remains a concern. For low-income nations, the risk of economic shocks remains high, especially given their limited resources.
Georgieva highlighted significant global uncertainty, particularly around the policies of the incoming US administration. President-elect Donald Trump, who will take office on January 20, has announced plans to impose additional tariffs on countries like China, Canada, and Mexico. Such measures could disrupt global trade and impact economies integrated into supply chains, including India.
Despite these challenges, inflation appears to be under control globally. Higher interest rates have helped curb inflation without causing a recession, though advanced economies are recovering faster than emerging markets.
India’s exact challenges remain unclear, but global trade tensions and higher borrowing costs could be contributing factors. The upcoming IMF report may shed more light on India’s economic outlook.
