Indian Economy To Face Challenges Amid Global Growth : IMF MD

Even though the global economy is showing steady growth, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has stated that the Indian economy may be slightly weaker in 2025. 

She noted that while global growth is expected to remain steady, there will be regional differences.

She mentioned that uncertainty around the United States' trade policy under the upcoming Donald Trump administration is a key factor impacting the Indian and global economy this year.

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Inflation and its impact on world

“As we all recognize, the higher interest rates that were necessary to fight inflation did not push the world economy into recession. They have delivered the desired results. Headline inflation is converging back to target sooner in advanced economies than in emerging markets,” she said.

The IMF MD mentioned that the US is performing better than expected, while the EU is facing some slowdown. She noted that Brazil is dealing with higher inflation and pointed out deflationary pressures and challenges with domestic demand in China.

Georgieva emphasized that low-income countries are vulnerable, as any new shock could negatively impact them. She added that due to the size and influence of the US economy, the world is closely watching the incoming administration's policy changes, especially regarding tariffs, taxes, government efficiency and deregulation.

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