India Holds Fastest-Growing Economy Tag as World Faces Fragile Outlook: UN Report

Despite a slight revision in growth estimates, India outpaces global giants with robust consumption, investment, and export performance amid global economic uncertainty.

United Nations, May 16:
India continues to retain its position as the fastest-growing large economy in the world, even as the global economic landscape becomes increasingly uncertain. According to the United Nations’ mid-year update of the World Economic Situation and Prospects (WESP) report, India is projected to grow at 6.3% in the current fiscal year (FY2025).

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While the forecast is slightly lower than the 6.6% projection made in January, it still places India well ahead of other major economies. The report notes that strong private consumption, public investment, and resilient services exports will continue to drive the country’s economic expansion.

“India remains one of the fastest-growing large economies,” said Ingo Pitterle, a senior economic affairs officer at the UN.

India’s Growth Amid Global Weakness

The WESP report underscores that global GDP growth is likely to dip to 2.4%, citing rising trade tensions and escalating policy uncertainty as major headwinds.

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By contrast, the following are 2025 growth forecasts for key global economies:

• India: 6.3%
• China: 4.6%
• United States: 1.6%
• European Union: 1.0%
• Japan: 0.7%
• Germany: -0.1%

The UN forecasts India’s growth to tick up to 6.4% in 2026, although that too is a downward revision from earlier estimates.

“It’s been a nervous time for the global economy,” said Shantanu Mukherjee, Director of the Economic Analysis and Policy Division. “Prospects have clearly diminished since January.”

Positive Domestic Indicators

The report notes improving macroeconomic conditions within India:

• Inflation is expected to moderate to 4.3% in 2025 from 4.9% in 2024, remaining within the Reserve Bank of India’s target range.
• Unemployment is projected to remain stable, though the report calls for greater gender inclusivity in workforce participation.

Risks on the Horizon

While India remains on solid footing, looming US tariffs could threaten merchandise exports. However, key sectors like pharmaceuticals, semiconductors, electronics, energy, and copper remain exempt for now, potentially shielding the economy from immediate disruption.

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The International Monetary Fund (IMF), in its latest forecast, also echoed similar optimism, projecting India’s economy to grow by 6.2% this year and 6.3% next year.

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India economy, UN WESP report 2025, fastest growing economy, global economic forecast, inflation India 2025, unemployment trends, US-India trade, India vs global growth, IMF forecast India