“India would again be the fastest growing large economy in the world” with a projected annual growth rate of 6.6 per cent, according to Hamid Rashid, the UN head of Global Economic Monitoring. He announced the projections at the release of the World Economic Situation and Prospects 2025 (WESP) report on Thursday. The report predicts India’s growth will accelerate to 6.8% in 2026.
India’s economy will benefit from strong services, pharmaceuticals, and electronics exports. The report also highlighted robust private consumption and rising investments as key growth drivers. Increased capital spending on infrastructure will amplify growth through multiplier effects, Rashid said.
The global economy, in contrast, will grow at only 2.8%. China’s growth will slow to 4.8% this year and 4.5% next year. The US economy will grow at 1.9% in 2025, down from 2.8% in 2024. India’s projected growth surpasses the 6.4% estimate by the National Statistics Office for 2024-25.
WESP predicts South Asia’s growth will reach 5.7% in 2025, driven by India’s strong performance and recoveries in Pakistan and Sri Lanka. However, it warned of risks like geopolitical tensions, debt problems, and climate challenges.
India’s services and manufacturing sectors will continue to expand. Favorable monsoon rains in 2024 have improved crop output expectations for 2025. Inflation is expected to ease to 4.3% this year, staying within the Reserve Bank of India’s target range of 2%-6%.
Employment indicators remain strong. Labor force participation reached record levels in 2024. The urban unemployment rate stayed steady at 6.6%. However, the report noted persistent gender gaps in the labor market.
India’s leadership in growth reflects its robust policy measures and economic resilience. It will continue to shape the region’s and world’s economic narrative in the coming years.
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