India’s GDP growth shifted down to 6.3% in 2025, and the country remains one of the fastest growing large economies: the United Nations
The United Nations launched a report on Thursday titled “The State and Prospects of the World Economic Economy to Mid-2025.”
“India remains a driver of large amounts of private consumption and public investment, even if the growth forecast has dropped to 6.3%,” said Ingo Pitterle, senior economic affairs officer for the Global Economic Monitoring branch of the Department of Economic and Economic Analysis and Policy, the United Nations Department of Economic and Social Affairs, in a news brief here.
The report said the global economy is at a critical moment of instability, characterized by increased trade tensions and increased policy uncertainty. Recently, the surge in tariffs has driven effective U.S. tariff rates to increase production costs, disrupt global supply chains and expand financial turmoil.
Despite forecasts of moderation, India remains one of the fastest growing large economies, supported by elastic consumption and government spending, the report said.
India’s economy will grow by 6.3% in 2025, down from 7.1% in 2024, the report said. “Resilient private consumption and strong public investment and strong exports of services will support economic growth,” it added. “While the looming U.S. tariffs put pressure on commodity exports, currently exempt sectors such as pharmaceuticals, electronics, semiconductors, energy and copper-copper limit the economic impact, although these exemptions may not be permanent.”
India’s 6.3% growth forecast for India in 2025 is slightly lower than the 6.6% estimated in January of this year at the United Nations world economic situation and outlook for 2025. India’s GDP growth in 2026 is expected to be 6.4%.
In India, unemployment rates are basically stable due to a stable economic situation, although the persistent gender differences in employment emphasize the need for more inclusive workforce participation. In India, inflation is expected to drop from 4.9% in 2024 to 4.3% in 2025, staying within the central bank’s target range, the report added.
The decline in inflation has caused most central banks in South Asia to start or continue to relax their currencies in 2025. The report noted that since February 2023, India’s Reserve Bank has maintained its policy rate at 6.5%, starting its easing cycle, which began in February 2025 in February 2025. IMF-supported programs.
The report said global GDP growth is now only 2.4% in 2025, down from 2.9% in 2024 and 0.4 percentage points lower than the January 2025 forecast.
“This is a tense moment for the global economy. In January this year, we expect two years of stability, if failed, growth, and since then, the outlook has decreased, accompanied by significant volatility in all aspects.
He said global economic growth forecast is 2.4% in 2025 and 2.5% in 2026.
“This is a 0.4 percentage point decline revision every year, which is more than what we expected in January. Now this is not a recession, but the slowdown will affect most countries and regions,” Mukherjee said.
Uncertainty about trade and economic policies, coupled with a volatile geopolitical landscape, has prompted companies to delay or expand key investment decisions.
The report said these developments are exacerbating existing challenges, including high debt levels and slow productivity growth, further undermining global growth prospects.
The report further said that this slowdown was based on broad-based and affected both developed and developing economies. Growth in the U.S. is expected to slow significantly, from 2.8% in 2024 to 1.6% in 2025, with tariff and policy uncertainties expected to have an impact on private investment and consumption.
China’s growth is expected to drop to 4.6% this year, reflecting a disruption to soft consumer sentiment, export-oriented manufacturing and ongoing real estate sector challenges.
Several other major development economies, including Brazil, Mexico and South Africa, are also facing a downgrade in growth due to weaker trade, slowing investment and falling commodity prices.
“The risk of tariff shocks could hit vulnerable developing countries, exacerbate growth, cut export income and exacerbate debt challenges, especially when these economies are already working to achieve the investment needed for long-term, sustainable development,” said Li Junhua, Deputy Minister of the United Nations.
It said that for many developing countries, this desolate economic prospect has undermined the prospect of job creation, poverty reduction and inequality resolution. For the least developed countries, growth is expected to drop from 4.5% in 2024 to 4.1% in 2025 to limit export revenues, tightening financial conditions and reducing the threat of official development aid flows will further erode the fiscal space and increase the risk of debt distress.
Elevated trade frictions have further intensified the multilateral trading system, leaving small and fragile economies increasingly marginalized in the global landscape. Strengthening multilateral cooperation is crucial to addressing these challenges.
It said revitalizing rules-based trading systems and providing targeted support to vulnerable countries is crucial to fostering sustainable and inclusive development.
