India predicted to grow at 6.5% in 2025 amid global slowdown: UN
According to the UN report, India will become the world's fastest growing economy at 6.5% in 2025. This growth will be possible due to strong public spending and monetary easing, while the global economy is facing a slowdown.
India is expected to grow by 6.5 per cent in 2025 on the back of continued strong public spending and ongoing monetary easing, while the world economy is undergoing a slowdown, driven by rising trade tensions and continued uncertainty, a UN report said. The United Nations Trade and Development (UNCTAD) in its new report 'Trade and Development Forecast 2025 - Under Pressure: Uncertainty Reshapes Global Economic Prospects' said global growth is projected to slow to 2.3 per cent in 2025, pushing the world economy into recession.
The report, released on Wednesday, cited growing threats, including trade policy shocks, increased financial instability and uncertainty, which risk derailing the global outlook. The report said that India is projected to grow at 6.5 percent in 2025, marginally down from 6.9 percent of 2024, but it will still maintain its position as the fastest-growing major economy.
UNCTAD "forecasts that India will grow by 6.5 per cent in 2025 on the back of continued strong public spending and ongoing monetary easing." The central bank's decision to cut interest rate by 25 basis points for the first time in five years in early February will boost domestic consumption as well as boost private investment plans," it said. UNCTAD forecasts that the South Asia region will grow by 5.6 per cent in 2025, as the fall in inflation will open the way for monetary easing in most parts of the region.
"Nevertheless, food price volatility will remain a risk and complex credit dynamics will continue to burden economies such as Bangladesh, Pakistan and Sri Lanka," it said. The report said that the world economy is going through a recession, which is due to rising trade tensions and persistent uncertainty. Escalating trade tensions are impacting global trade, UNCTAD said, adding that supply chains are being disrupted by recent tariff measures and forecasts are falling short.
"Trade policy uncertainty is at historic highs, and this is already translating into delays in investment decisions and fewer hiring," the report said. The recession will affect all countries, but UNCTAD is concerned about developing countries and especially the most vulnerable economies.
Many low-income countries are facing a "perfect storm" of deteriorating external financial conditions, unstable debt and weak domestic growth. UNCTAD underscores the real threat to economic growth, investment and growth progress, particularly for the most vulnerable economies. The UN agency pointed to the growth of trade between developing countries (South-South Trade) as a source of resilience.
The report notes that already accounting for nearly a third of global trade, "the potential for South-South economic integration provides opportunities for many developing countries." UNCTAD has urged dialogue and dialogue along with strengthening existing trade and economic ties, as well as stronger regional and global policy coordination. "Coordinated action will be necessary to restore confidence and keep growth back on track," the report said. "