India’s 2025 Growth Forecast Trimmed to 6.3%, Still Among Fastest-Growing Major Economies: UN

UN Report Highlights Resilient Indian Economy Amid Global Slowdown​

New Delhi, May 16 — The United Nations has revised India’s economic growth forecast for 2025 downward to 6.3 percent, from the earlier estimate of 6.6 percent made in January. Despite this moderation, India continues to stand out as one of the fastest-growing large economies globally, buoyed by robust private consumption and strong public investment, according to the UN’s latest economic outlook report.
The mid-2025 update of the World Economic Situation and Prospects report was released on Thursday, highlighting the fragility of the global economic landscape and India's comparatively resilient position.

Key Drivers: Consumption, Investment, and Services Exports​

Ingo Pitterle, Senior Economic Affairs Officer at the UN Department of Economic and Social Affairs (DESA), remarked that India's economic momentum is anchored in resilient consumer demand, vigorous public capital expenditure, and strong services exports. However, external pressures, particularly increased US tariffs, pose a potential challenge to merchandise exports. The report noted that exempt sectors such as pharmaceuticals, electronics, semiconductors, energy, and copper may help mitigate the impact, although these exemptions may not be permanent.
India’s projected GDP growth of 6.3 percent in 2025 marks a slight dip from the 7.1 percent growth estimated for 2024, with growth in 2026 forecast at 6.4 percent.

Stable Macroeconomic Indicators, But Employment Disparities Persist​

The report projects inflation in India to ease from 4.9 percent in 2024 to 4.3 percent in 2025, staying well within the Reserve Bank of India’s target range. The steady inflationary environment has allowed the RBI to begin its monetary easing cycle in February 2025, after holding the policy rate at 6.5 percent since February 2023.
While unemployment remains largely stable, the report highlighted persistent gender disparities in workforce participation, calling for more inclusive labour market policies.

South Asia and Global Growth Outlook​

In the broader South Asian context, central banks have begun monetary easing, capitalising on declining inflation. Meanwhile, countries like Bangladesh, Pakistan, and Sri Lanka are expected to continue with fiscal consolidation and reforms under IMF-supported frameworks.
However, global conditions are far from favourable. The report pegs global GDP growth at 2.4 percent for 2025, down from 2.9 percent in 2024. This is also 0.4 percentage points lower than the January forecast. A slight improvement to 2.5 percent is expected in 2026, but the global economy remains under strain.

Major Economies Face Slowdown​

The slowdown is broad-based, affecting both developed and developing nations:
The United States is expected to slow significantly due to tariffs and policy uncertainty, while China continues to grapple with weak consumer demand and a fragile real estate sector. Similarly, Brazil, Mexico, and South Africa are witnessing downgraded growth projections amid weak trade and falling commodity prices.

Urgent Call for Global Cooperation​

UN Under-Secretary-General for Economic and Social Affairs Li Junhua warned that the global economic deceleration could severely hinder poverty reduction, job creation, and sustainable development, especially in the world’s most vulnerable regions.
"The tariff shock is hitting developing nations hard, threatening export revenues and worsening debt challenges," he said. The report advocates for revitalising multilateral trade mechanisms and offering targeted support to help vulnerable economies navigate these turbulent times.

Conclusion​

While India faces external pressures and slightly moderated growth, its economy remains a global standout. Strong domestic fundamentals, a stable macroeconomic environment, and strategic public investments continue to bolster its growth trajectory in a world marked by rising volatility and uncertainty.