NewDelhi: The International Monetary Fund (IMF) has forecasted a slight weakening of India’s economic growth in 2025, despite expectations of steady global expansion. This projection was shared by IMF Managing Director Kristalina Georgieva during a press briefing on Friday, just days before the release of the World Economic Outlook on 17 January and the inauguration of Donald Trump as the US President on 20 January.
Georgieva noted that while the US economy is performing better than anticipated, significant uncertainty surrounds the incoming Trump administration’s trade policies. This uncertainty is contributing to global economic headwinds and driving long-term interest rates higher.
“The US is doing quite a bit better than we expected before; the EU is somewhat stalling, and India is a little weaker,” Georgieva stated, providing a snapshot of regional economic trends.
Despite inflation nearing the US Federal Reserve’s target and a stable labour market, Georgieva suggested that the Fed might wait for more data before implementing further interest rate cuts. She expects interest rates to remain “somewhat higher for quite some time.”.
The IMF chief’s comments offer a glimpse into the Fund’s evolving global outlook, though she refrained from providing detailed projections. In October 2024, the IMF had raised growth forecasts for the US, Brazil, and Britain, while lowering expectations for China, Japan, and the Eurozone, citing risks from potential trade wars, ongoing conflicts, and tight monetary policies.
The IMF’s July 2024 forecast for global growth in 2025 was slightly reduced to 3.2%, with a warning that medium-term global growth could decline to 3.1% over five years, falling below pre-pandemic trends.
As the world awaits the comprehensive World Economic Outlook report, Georgieva’s remarks underscore the complex interplay of regional economic performances and policy uncertainties shaping the global economic landscape in 2025.