The Indian economy is likely to be “a little weaker” in 2025 despite steady global growth, the International Monetary Fund’s Managing Director Kristalina Georgieva said on Friday, reported PTI.

“The US [United States] is doing quite a bit better than we expected before, the EU [European Union] is somewhat stalling, [and] India a little weaker,” Georgieva said at her annual media roundtable, without elaborating further.

Georgieva added that more details on India’s economic outlook would be provided in the World Economic Outlook update next week.

India’s gross domestic product growth is projected to sharply fall to a four-year low of 6.4% in the financial year 2024-’25, from 8.2% in 2023-’24, according to the first advance estimates released by the National Statistics Office on Tuesday.

The projection released by the Ministry of Statists and Programme Implementation is slightly below the Reserve Bank of India’s projection of a growth rate of 6.6%. The decline in Gross Domestic Product growth could be due to a possible decline in manufacturing and investment growth.

Growth in the manufacturing sector may drop to 5.3% from 9.9% last year. Similarly, investment growth is predicted to decline to 6.4%, down from 9%. However, the agriculture sector is projected to grow by 3.8%, up from 1.4%.

The advance estimates give a broad picture of how the country’s economy may perform in the upcoming year and help the finance ministry decide on budgetary allocations. Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2025 on February 1.

The figures on Tuesday came over a month after data showed that the real gross domestic product growth rate slumped to an 18-month low of 5.4% in the July-September quarter, despite the 6.7% increase in the first quarter.

On other regions, Georgieva noted that Brazil was grappling with higher inflation while China faced deflationary pressures and challenges in 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,” she added.

Global uncertainty is expected to remain high, driven largely by the United States’ economic policies, Georgieva 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,” she said.

Donald Trump will be sworn in as the 47th President of the United States on January 20, replacing Joe Biden. Trump has announced plans to impose additional tariffs on countries like China, Canada and Mexico, describing them as a key policy tool.

The International Monetary Fund expects global disinflation to continue, Georgieva noted.

“As we all recognise, the higher interest rates that were necessary to fight inflation did not push the world economy into recession,” she said. “They have delivered the desired results. Headline inflation is converging back to target sooner in advanced economies than in emerging markets.”

Uncertainty in trade policy has contributed to higher long-term interest rates globally, even as short-term interest rates have been on the decline, Georgieva added.

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