IMF sees little weaker Indian economy, steady global growth in 2025

The Indian economy is expected to be "a little weaker" in 2025 despite steady global growth, IMF Managing Director Kristalina Georgieva has said. Georgieva also said she expects quite a lot of uncertainty in the world this year mainly around the trade policy of the US. In her annual media roundtable with a group of reporters on Friday in Washington, she said global growth is expected to be steady in 2025, but with regional divergence.
Georgieva said the U.S. economy was doing "quite a bit better" than expected, although there was high uncertainty around the trade policies of the administration of President[elect Donald Trump that was adding to headwinds facing the global economy and driving long-term interest rates higher.Brazil was facing somewhat higher inflation, she said. That uncertainty is actually expressed globally through higher long-term interest rates, even though short-term interest rates have gone down, the IMF Managing Director said.
In China, the world’s second-largest economy, the International Monetary Fund (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,” Georgieva said. “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,” Georgieva said.
Significant demographic shifts are underway in much of the world. Over half of the world’s economies, accounting for two-thirds of the global population, now have fertility rates below the replacement fertility level of 2.1 children per woman. Without action, these populations will age and decline over time, says IMF outlook.Countries such as Italy, Japan, and Germany are already experiencing the effects of this demographic transition. Lower birth rates result in a smaller working-age population, which in turn affects economic productivity and increases the burden on social support systems. The ratio of retirees to workers is rising, leading to higher costs for pensions and health care, and putting pressure on public finances, it said.