India Remains Fastest-Growing Economy Amid Global Uncertainty: UN

India Remains Fastest-Growing Economy Amid Global Uncertainty: UN

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India is poised to remain the fastest-growing large economy in the world, even as global economic conditions grow increasingly fragile: UN

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India is poised to remain the fastest-growing large economy in the world, even as global economic conditions grow increasingly fragile, according to a new report by the United Nations. The UN’s mid-year update of the World Economic Situation and Prospects (WESP) forecasts India’s GDP to grow by 6.3% in 2025—down from its earlier estimate of 6.6% made in January. Despite the downward revision, India continues to outpace its global counterparts, driven by robust private consumption and public investment.

“India remains one of the fastest-growing large economies,” said Ingo Pitterle, Senior Economic Affairs Officer at the UN, while presenting the updated economic outlook. The report predicts a slightly stronger growth of 6.4% in 2026, though this too is a downgrade from earlier projections.

While India maintains economic momentum, the global outlook remains uncertain. “The world economy is at a precarious moment,” the UN report warned, pointing to rising trade tensions and policy uncertainty that have significantly dampened expectations for 2025. Shantanu Mukherjee, Director of the Economic Analysis and Policy Division, added that the global growth scenario has weakened since January, when the outlook was for two years of steady, albeit modest, expansion.

India’s projected growth stands in stark contrast to the global average of 2.4% for 2025. For comparison, China is expected to grow at 4.6%, the US at 1.6%, Japan at 0.7%, the EU at 1.0%, and Germany is forecast to contract by 0.1%. The report credited India’s resilience to strong domestic demand, public infrastructure spending, and buoyant services exports.

On inflation and employment, the WESP report struck a positive tone. It forecast that inflation in India would ease from 4.9% in 2024 to 4.3% in 2025, staying within the Reserve Bank of India’s target range. The labour market is expected to remain stable, though the report highlighted that persistent gender disparities in employment call for greater inclusivity in workforce participation.

The report also flagged external risks, particularly those arising from trade tensions with the United States. While some Indian export sectors—such as pharmaceuticals, electronics, semiconductors, energy, and copper—are currently exempt from potential US tariffs, the UN cautioned that these exemptions may not be permanent and could pose future risks.

In a separate outlook last month, the International Monetary Fund (IMF) projected India’s GDP to grow by 6.2% in 2025 and 6.3% in 2026, aligning closely with the UN’s estimates and reinforcing India’s position as a global growth leader amid a turbulent global economic climate.

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