NEW DELHI: Kristalina Georgieva, International Monetary Fund (IMF) managing director, on Friday said India’s economy was expected to be a “little weaker” in 2025 as she presumed a lot of uncertainty in the world this year mainly around the US trade policies.
“The US is doing quite a bit better than we expected before, the EU is somewhat stalling, (and) India a little weaker,” Georgieva said without substantiating any further.
In her annual media roundtable with a group of reporters on Friday, she said global growth is expected to be steady in 2025, but with regional divergence.
She also said China was witnessing deflationary pressure and ongoing challenges with domestic demand.
“Low-income countries, despite all the efforts they are making, are in a position when any new shock can affect them quite negatively,” Georgieva was quoted as saying by news agency PTI.
“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,” the IMF managing director said.
India’s economy is estimated to slow to a four-year low in 2024-25 due to moderation in manufacturing and sluggish investment, while robust growth in the farm sector is expected to provide some support and help boost rural consumption.
The first advance estimates for the current financial year, released by the National Statistics Office (NSO) on Tuesday, showed gross domestic product (GDP) is estimated to grow by 6.4%, sharply lower than the 8.2% recorded in 2023-24.
A recent finance ministry report had said that a combination of monetary policy stance and macroprudential measures by the central bank, and structural factors, could have led to the slowdown and all eyes are now on the February 1 Budget for measures to revive demand and push growth against the backdrop of global uncertainty and geopolitical tensions.