India Retains Title of Fastest-Growing Economy Amid Global Uncertainty: UN

India continues to lead as the fastest-growing major economy in the world, with a projected GDP growth rate of 6.3% for the current fiscal year, according to the United Nations' mid-year update of the World Economic Situation and Prospects (WESP) report. The country’s growth trajectory stands in sharp contrast to a slowing global economy, which the UN describes as being at a “precarious moment.”

The report expects India’s growth to inch up to 6.4% in 2025, although this marks a downward revision of 0.3 percentage points from the UN’s earlier forecast in January.

Global Economic Outlook Weakens

Releasing the WESP report, Shantanu Mukherjee, Director of the UN’s Economic Analysis and Policy Division, expressed concern over the shifting global economic scenario. “In January this year, we were expecting two years of stable, if subpar growth, and since then, prospects have diminished,” he said.

The report blames rising trade tensions, policy uncertainty, and sluggish global demand for the increasingly fragile economic outlook. The world economy is projected to grow by only 2.4% in 2024, underscoring the significance of India's performance.

India’s Growth Outpaces Other Major Economies

India’s economic resilience becomes even more evident when compared to the growth forecasts of other major economies:

• China: 4.6%

• United States: 1.6%

• European Union: 1%

• Japan: 0.7%

• Germany: -0.1%

According to the WESP, India’s robust domestic consumption, public investment, and expanding services exports are the main contributors to its sustained growth.

Inflation Expected to Decline Further

The WESP report highlighted encouraging signs on the inflation front. Inflation in India is expected to decrease from 4.9% in 2024 to 4.3% in 2025, keeping it within the Reserve Bank of India’s target range. This aligns with the broader trend of macroeconomic stability that India has maintained despite global volatility.

Employment Stable but Inclusivity Challenges Persist

On the employment front, the report noted that unemployment remains largely stable due to consistent economic performance. However, it also pointed out that gender disparities in workforce participation remain a challenge. The report urges greater inclusivity in employment to ensure balanced and sustainable growth.

Export Sector Faces Risk from US Tariff Threats

The WESP flagged risks to India’s merchandise export sector, particularly in light of possible tariff threats from the United States. Although key sectors such as pharmaceuticals, electronics, semiconductors, energy, and copper are currently exempt, these exemptions are not guaranteed to remain in place, the report cautioned.

IMF Projects Similar Growth Path

In line with the UN’s outlook, the International Monetary Fund (IMF) last month also predicted India’s GDP to grow by 6.2% in 2024 and 6.3% in 2025, reaffirming India’s position as a standout economy on the global stage.