IMF chief predicts India's economy to weaken in 2025
What's the story
Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has predicted a slight weakening of India's economy in 2025. Despite the possible weakening of India's economy, Georgieva expects global growth to remain steady this year. However, she also warned about potential regional disparities. "The US is doing quite a bit better than we expected before, the EU is somewhat stalling, (and) India a little weaker," Georgieva stated.
Global challenges
Brazil faces inflation, China experiences deflationary pressure
Georgieva also emphasized the economic challenges other countries are facing. She said Brazil is dealing with slightly higher inflation while China, the world's second-largest economy, is facing deflationary pressure and persistent domestic demand issues. "Low-income countries, despite all the efforts they are making, are in a position where any new shock can affect them quite negatively," Georgieva warned.
Policy uncertainty
Uncertainty looms over 2025 due to economic policies
Georgieva noted that the high level of uncertainty anticipated in 2025, particularly in terms of economic policies, is a cause for concern. She stressed that this uncertainty is particularly pronounced around future trade policy, which could create headwinds for the global economy.
Inflation outlook
IMF expects global disinflation to continue
On the subject of inflation, Georgieva said the IMF expects global disinflation to continue. She also said that higher interest rates employed to fight inflation have not thrown the world economy into recession but have produced desired results. "Headline inflation is converging back to target sooner in advanced economies than in emerging markets," she added.