New Delhi: Amid global economic instability, India is poised to maintain its position as the world’s fastest-growing major economy in 2025, with an expected growth rate of 6.3 per cent, according to the United Nations’ World Economic Situation and Prospects (WESP) report.
While this figure marks a slight downward revision from the UN’s January estimate of 6.6 per cent, the report attributes the change to a more cautious global economic outlook, shaped by policy uncertainties and trade tensions.
The report highlights India’s continued economic momentum, fuelled by strong household consumption, robust public investment, and resilient services exports.
According to the UN: “Despite a projected moderation, India remains one of the fastest-growing large economies, supported by resilient consumption and government spending.”
Looking ahead to 2026, the report forecasts India’s GDP to expand by 6.4 per cent, signalling steady economic performance despite external risks.
On the inflation front, India is expected to see further relief. The rate is forecast to ease from 4.9 per cent in 2024 to 4.3 per cent in 2025, remaining within the Reserve Bank of India’s comfort zone.
The central bank, which maintained a policy rate of 6.5 per cent since February 2023, initiated an easing cycle in early 2025, the report noted.
Employment trends remain largely stable, though the UN pointed out persistent challenges such as low female participation in the formal workforce, an area requiring policy focus to unlock the economy’s full potential.
Externally, the report flagged potential risks from rising US tariff barriers. While key Indian export sectors like pharmaceuticals and electronics are currently exempt from new tariffs, any policy shift could weigh on India’s export revenue and manufacturing competitiveness.
Compared to India’s 6.3 per cent growth, China is projected to grow at 4.6 per cent, the US at 1.6 per cent, the EU at 1 per cent, and Japan at just 0.7 per cent. Germany could see a slight contraction of -0.1 per cent.
The global GDP growth is expected to slow from 2.9 per cent in 2024 to 2.4 per cent in 2025, with emerging markets like Brazil, Mexico, and South Africa facing similar headwinds.
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