India stands out as global growth driver while China decelerates, says IMF chief
International Monetary Fund (IMF) Managing Director Kristalina Georgieva delivers remarks ahead of the annual IMF-World Bank fall meetings, at the Milken Institute in Washington, D.C., U.S., October 8, 2025.
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REUTERS/Jonathan Ernst
India has emerged as a key growth engine, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said on Wednesday. She also noted the high US tariffs applied to India.
“Global growth patterns have been changing over the years, notably with China decelerating steadily while India develops into a key growth engine,” Georgieva said in her curtain-raiser speech for the Annual Meetings. This remark comes at a time when almost all agencies have revised India’s growth estimates to a range of 6.5−6.9 per cent for the current fiscal year, although some have lowered the growth projection to between 6.3−6.5 per cent for the next fiscal year.
The Annual Meetings of the World Bank Group (WBG) and the IMF will take place from Monday, October 13 to Saturday, October 18, 2025. The World Economic Outlook will be released during the meeting. According to Georgieva, global growth is forecast at roughly 3 per cent over the medium term—down from 3.7 per cent pre-pandemic.
Resilience amid challenges
“As our World Economic Outlook will explain next week, we see global growth slowing only slightly this year and next. All signs point to a world economy that has generally withstood acute strains from multiple shocks,” she stated. Explaining this resilience, she put forward four reasons: improved policy fundamentals, private sector adaptability, less severe tariff outcomes than initially feared—for now—and supportive financial conditions—for as long as they hold.
“In many parts of the world, sustained efforts have delivered more credible monetary policy, deeper local currency bond markets, new fiscal rules, and— during the pandemic—swift, decisive, and globally coordinated fiscal action to limit the immediate pain and the lasting scars. Emerging market economies, especially, have significantly upgraded their policy frameworks and institutions,” she said. It should be noted that India is categorised as an emerging economy.
US tariffs remain a concern
Talking about US tariff action, the IMF MD said that the US trade-weighted tariff rate has fallen to 17.5 per cent now from 23 per cent in April, yet it remains much higher than before. The effective rate is now far above the rest of the world’s, which has held relatively steady this year, with very few cases of retaliation. “In short, the world has avoided a tit-for-tat slide into trade war—so far. But openness has nonetheless taken a big hit. And the story is not over—US tariff rates keep moving,” she cautioned.
“Trade deals with the UK, the EU, Japan, and soon Korea have nudged some rates down while disputes with Brazil and India have pushed others up,” she explained. Furthermore, the rates of other countries are also likely to change.
Global tests ahead
Meanwhile, Georgieva cautioned that global resilience has not yet been fully tested. “And there are worrying signs the test may come. Just look at the surging global demand for gold.” Spurred by valuation effects and net purchases—partly reflecting geopolitical factors—holdings of monetary gold now exceed one-fifth of the world’s official reserves. “On tariffs, the full effect is still to unfold. In the US, margin compression could give way to more price passthrough, raising inflation with implications for monetary policy and growth,” she concluded.
Published on October 8, 2025
