India remains fastest-growing economy amid global uncertainty: UN

India remains the fastest-growing large economy, according to the United Nations (UN). As per the UN’s World Economic Situation and Prospects (WESP) mid-year report, the Indian economy is expected to grow by 6.3 per cent this fiscal year, even as the global economy faces a “precarious moment.”  Ingo Pitterle, a senior UN economist, said the growth is driven by strong private consumption and public investment. The report projects India’s growth to rise slightly to 6.4 per cent next year. In contrast, global growth is forecast at just 2.4 per cent in 2025, with trade tensions and policy uncertainty weakening the outlook. The report also noted positive trends in inflation and employment. Inflation is expected to ease from 4.9 per cent in 2024 to 4.3 per cent in 2025, remaining within the central bank’s target range.
The United Nations (UN) in its World Economic Situation and Prospects (WESP) report said that the world economy is at a precarious moment." The report added, "heightened trade tensions, along with policy uncertainty, have significantly weakened the global economic outlook for 2025." According to Shantanu Mukherjee, the Director of the Economic Analysis and a Policy Division, WESP said in a statement, "It's been a nervous, time for the global economy." “In January this year, we were expecting two years of stable, if subpar growth, and since then, prospects have diminished,” he added. Against this picture, the growth of the world’s fifth-largest economy, India, contrasts with the global rate of 2.4 per cent this year, and that of other major economies, according to the WESP.
The projection for China is 4.6 per cent, for the US 1.6 per cent, Germany (negative) -0.1 per cent, Japan 0.7 per cent, and the European Union 1 per cent. “Resilient private consumption and strong public investment, alongside robust services exports, will support economic growth” for India, the report said. On inflation and employment, the WESP saw positive trends for India. “Inflation is projected to slow from 4.9 per cent in 2024 to 4.3 per cent in 2025, staying within the central bank’s target range,” it said.
“Unemployment remains largely stable amid steady economic conditions,” it said, but added a note of caution that “persistent gender disparities in employment underscore the need for greater inclusivity in workforce participation”. The WESP drew attention to the risks to the export sector from the US tariff threats. “While looming US tariffs weigh on merchandise exports, currently exempt sectors- such as pharmaceuticals, electronics, semiconductors, energy, and copper, could limit the economic impact, though these exemptions may not be permanent,” it said. The International Monetary Fund last month projected India’s economy to grow by 6.2 per cent this year and 6.3 per cent next year. 

(Business Correspondent)