India Remains World’s Fastest-Growing Major Economy with 6.6% Growth: UN

India is poised to remain the fastest-growing large economy globally, with an anticipated annual growth rate of 6.6% for 2024, according to Hamid Rashid, UN head of Global Economic Monitoring. Speaking at the launch of the UN’s flagship report, World Economic Situation and Prospects 2025 (WESP), he noted that India’s GDP growth rate is projected to increase slightly to 6.8% in 2025.

Key Drivers of India’s Economic Growth

The WESP report attributes India’s growth to several factors:

1. Export Growth: Strong performance in services and goods, particularly in pharmaceuticals and electronics.

2. Private Consumption and Investment: A robust internal market is boosting the economy.

3. Capital Expenditure: Infrastructure development has significant multiplier effects on economic growth.

4. Manufacturing and Services: These sectors are driving consistent expansion across the forecast period.

Agriculture: A Bright Spot

India’s agricultural sector is set to benefit from favorable monsoon rains in 2024. These rains have improved the summer-sowing areas for major crops, bolstering expectations for agricultural output in 2025.

Comparative Global Growth Outlook

Globally, the growth rate remains sluggish at 2.8% in 2024. Key comparisons include:

• China: Growth forecast lowered to 4.8% in 2024, with further decline expected next year.

• United States: Economic growth projected at 1.9% this year, down from 2.8% in 2023.
  India’s projected growth surpasses that of these major economies, reinforcing its global economic leadership.

Regional Outlook for South Asia

The WESP report offers a mixed outlook for South Asia:

• Strong Performers: India leads with robust growth, while Bhutan and Nepal are expected to grow by over 5% in 2025.

• Recovering Economies: Pakistan and Sri Lanka are projected to see modest growth of 3.4% and 4%, respectively, contingent on resolving debt challenges.

• Challenges in Bangladesh: Political unrest and uncertainty are expected to slow growth to 4.2%.

However, the region faces significant risks, including geopolitical tensions, declining external demand, debt challenges, and climate hazards.

India’s Inflation Trends and Price Stability

Consumer price inflation in India is forecasted to decline slightly from 4.8% in 2024 to 4.3% in 2025. Despite adverse weather causing spikes in food prices last year, inflation remains within the Reserve Bank of India’s target range of 2–6%.

Labour Market and Employment Indicators

India’s labor market indicators remain strong, with labor force participation near record highs. The urban unemployment rate was 6.6% in 2024, consistent with the previous year. However, the report highlights substantial gender gaps in workforce participation despite some progress.

Conclusion: India's Economic Leadership Amid Global Challenges

India’s robust economic growth, projected at 6.6% for 2024 and 6.8% for 2025, solidifies its position as the fastest-growing large economy in the world. This growth is underpinned by strong export performance, dynamic manufacturing and services sectors, and favorable agricultural conditions. While global and regional economies face headwinds like geopolitical tensions, climate risks, and debt challenges, India’s focus on infrastructure development and private investment offers a beacon of resilience and optimism. With inflation within manageable levels and steady employment indicators, India continues to set a high bar for economic performance amidst a challenging global landscape.