The Indian economy is expected to experience slower growth in 2025, despite steady global expansion, according to IMF Managing Director Kristalina Georgieva.

Georgieva also said she expects quite a lot of uncertainty in the world this year mainly around the trade policy of the US.

Speaking at her annual media roundtable on Friday, Georgieva highlighted steady global growth expectations for the year, but with notable regional differences.

She noted that while the U.S. economy is performing better than expected, the European Union is facing stagnation, and India’s economy is projected to weaken. However, Georgieva did not provide further details on India’s economic outlook, adding that more information would be available during the World Economic Outlook update week. She also pointed out that Brazil is grappling with higher inflation, while China is facing deflationary pressures and domestic demand challenges.

Georgieva expressed concern about low-income countries, stating that any new shock could have a severe impact on them despite ongoing efforts to stabilize their economies. She also highlighted the uncertainty surrounding global economic policies, particularly with the U.S. under its new administration, set to be led by Donald Trump, who takes office on January 20. The IMF anticipates that the new U.S. administration’s trade policies, including potential tariff increases on countries like China, Canada, and Mexico, could add to the global economic headwinds.

This uncertainty, Georgieva said, is reflected in higher long-term interest rates globally, even as short-term rates have decreased. She further noted that while inflation is easing worldwide, the effects are more visible in advanced economies, with headline inflation converging back to targets sooner than in emerging markets.

Overall, the IMF expects global disinflation to continue in 2025, with geopolitical and economic policy shifts playing a key role in shaping the year’s economic landscape.