Inflation will continue to decline globally, IMF chief spoke on relief in prices

According to IMF Managing Director Kristalina Georgieva, prices will continue to soften globally even in the year 2025. He said that the high interest rates needed to fight inflation did not push the global economy into recession. According to Georgieva, this is a matter of relief and has led to a softening of prices. High interest rates have given the desired results. Headline inflation is coming back within the target sooner in advanced economies than in emerging markets.

According to the IMF chief, the Indian economy may remain "a little weak" in 2025 despite stable global growth. Georgieva also said that she expects a lot of uncertainty in the world this year, mainly about US trade policy.

The IMF MD said during the annual media roundtable on Friday that global growth is likely to be steady in 2025 but with regional variation. Georgieva said she expects the Indian economy to be a little weaker in 2025. However, she did not say anything more about this. More information will be given about this in the World Economy Outlook Update Week.

She said, "The US is performing much better than we expected, the European Union is somewhat stagnant, and India is slightly weaker." She further said that Brazil was confronting "somewhat higher" inflation. She said the IMF was battling deflationary pressures and domestic demand in China, the world's second-largest economy.

Georgieva said, "Low-income countries, despite all their efforts, are in a situation where any new shock can have a significant negative impact on them." Georgieva said, "We expect that there will be a lot of uncertainty in 2025, especially in terms of economic policies. It is not surprising that, given the size and role of the US economy, there is keen interest globally in the policy directions of the incoming administration, especially on matters related to tariffs, taxes, regulation, and government efficiency."

Donald Trump will be sworn in on January 20 as the 47th President of the United States, replacing Joe Biden at the White House. The 78-year-old has announced plans for more tariffs against countries like China, Canada, and Mexico. He has publicly proclaimed the use of tariffs as one of his major policy tools. According to Georgieva, the IMF expects prices to remain soft globally. He said: "The high interest rates necessary to combat inflation did not plunge the world economy into recession.