UNCTAD Forecasts 6.5% Growth For India In 2025 Despite Global Slowdown

India will likely grow by 6.5% in 2025, driven by strong public spending and easing monetary policies, according to a new UN Trade and Development (UNCTAD) report.

The global economy, meanwhile, will likely decelerate, facing rising trade tensions and economic uncertainty.

The report, titled ‘Trade and Development Foresights 2025 – Under Pressure: Uncertainty Reshapes Global Economic Prospects’, projects global growth to fall to 2.3%, suggesting the world is heading toward a recessionary trend.

Key Threats To Global Recovery

Citing financial volatility, rising uncertainty, and shocks in trade policy, the report warns that these growing threats could derail global economic prospects.

India, while slowing slightly from its estimated 6.9% growth in 2024, will maintain its position as the fastest-growing major economy.

The report attributes this momentum to a recent 25 basis point rate cut by India’s central bank – its first in five years – which is expected to support household spending and spur private investment.

UNCTAD also expects South Asia to grow by 5.6% in 2025, as lower inflation enables regional monetary easing.

However, the agency cautions that food price fluctuations and debt burdens in countries like Bangladesh, Pakistan, and Sri Lanka may pose ongoing challenges.

The report emphasizes that rising global trade tensions are disrupting supply chains and affecting investment, with trade policy uncertainty reaching historically high levels.

This has led to postponed investment decisions and cautious hiring across many regions.

UNCTAD remains especially concerned about the impact on developing and low-income countries, where a combination of poor domestic growth, external financial stress, and unsustainable debt creates what it calls a ‘perfect storm’.

Amid this challenging environment, the report highlights the growing importance of South-South trade, which now makes up around one-third of global trade.

It suggests that increased economic integration among developing countries could serve as a stabilizing force.

Calling for stronger global cooperation, UNCTAD underscores the need for sustained dialogue and coordinated policies to restore confidence and keep development on track.

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