India & Global Economy Oct 18, 2025: Fiscal Updates, Growth Forecasts & Trade Outlook

 Globally, policymakers grapple with fiscal pressures. The IMF urges countries to rebuild fiscal buffers and reduce deficits to weather shocksimf.org. In the U.S., fiscal health is a hot topic: Treasury chief Bessent noted that the 2025 deficit edged down to ~$1.817T (still above $1.8T) despite higher tariff revenuesreuters.com, and he voiced hopes the deficit/GDP ratio can be cut towards 3% by fostering growth and restraintreuters.com. A key factor is the record private investment boom – driven by tech and AI – which the Treasury sees as sustainable and potentially offsetting global headwindsreuters.com. However, short-term risks like the government shutdown could trim growth temporarilyreuters.com. In developing economies, growth surprises are also emerging: India’s surprising 7.8% GDP jump in Q1 FY2025-26 (vs 6.5% last year) has prompted analysts to upgrade growth forecastsreuters.com. On the policy front, several countries are assessing fiscal measures: for example, India’s government recently announced consumption incentives (e.g. GST rationalization) to boost demandreuters.com. Globally, trade diplomacy is another lever – analysts note that new trade deals or tariff rollbacks (like a recent G7 dialogue on rare earths and high-tech exports) could lift growth if realized, whereas renewed trade wars threaten to subdue it