United Nations: Despite rising global economic challenges, India continues to hold its position as the fastest-growing major economy, according to the United Nations. In its mid-year update of the World Economic Situation and Prospects (WESP) report released on May 16, the UN projected India’s economy to grow by 6.3% in the current fiscal year. This growth, although slightly revised downward from January’s 6.6% estimate, stands out in a world facing significant economic headwinds.
Ingo Pitterle, a senior economic affairs officer at the UN, said that India’s growth is being propelled by resilient private consumption, strong public investment, and robust services exports. The report also forecasts India’s GDP to grow by 6.4% in 2026, again slightly lower than earlier estimates but still leading among large economies.
The report paints a grim picture for the global economy, describing the current period as a “precarious moment.” Heightened geopolitical tensions, policy uncertainty, and trade disruptions have weakened global economic prospects for 2025, with global GDP growth projected at just 2.4%.
In comparison, other major economies are facing slower growth or contraction. The UN projects China’s economy to grow at 4.6%, the United States at 1.6%, the European Union at 1%, Japan at 0.7%, and Germany to see negative growth at -0.1%.
On the domestic front, India’s inflation outlook remains positive, with the WESP projecting a decline from 4.9% in 2024 to 4.3% in 2025—well within the Reserve Bank of India’s target range. Unemployment is expected to remain stable amid steady economic conditions. However, the report highlighted persistent gender disparities in employment, calling for greater inclusivity in workforce participation.
The WESP also raised concerns about external risks, particularly potential impacts on exports from looming U.S. tariffs. While sectors like pharmaceuticals, electronics, semiconductors, energy, and copper are currently exempt, the report warned these exemptions might not be permanent.
The UN’s forecast aligns closely with that of the International Monetary Fund (IMF), which last month projected India’s growth at 6.2% for 2025 and 6.3% for the following year.
Despite global economic instability, India’s strong fundamentals continue to underpin its growth story, setting it apart as a bright spot in an otherwise uncertain global landscape.
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