Saturday Oct 18, 2025
Saturday Oct 18, 2025
Thursday, 16 October 2025 05:56 - - {{hitsCtrl.values.hits}}
Global growth will hold at 3.2% in 2025, but the outlook is fragile as trade tensions and China’s slowing, export-reliant model weigh on demand, the International Monetary Fund (IMF) said at the launch of its World Economic Outlook.
The IMF said the impact of new tariffs has been modest so far due to exemptions, limited retaliation, and supply-chain rerouting.
It warned that an escalation could cut global output by about 0.3 percentage points. Looser financial conditions, helped by a weaker dollar and strong US tech-driven investment, have cushioned the hit.
On China, the Fund flagged persistent property-sector weakness, soft domestic demand, and a risk of debt deflation. It said large subsidies in strategic sectors such as electric vehicles and solar have boosted output but risk misallocation without broad productivity gains, urging a pivot towards consumption-led growth.
The Fund has revised India’s 2025-26 growth projection upward to 6.6%, an increase of 0.2 percentage points, citing continued domestic momentum that is expected to offset the drag from higher US tariffs on Indian exports.
India’s economy expanded by 7.8% in the April-June quarter, driven by resilient private consumption, helping it retain its position as the fastest-growing major economy.
The IMF noted that despite headwinds from the US’ 50% tariff hikes under President Donald Trump, India’s domestic demand strength is cushioning the external shock and sustaining growth.
