In January 2025, United Nations- Department of Economic and Social Affairs (UN-DESA) released a report titled “World Economic Situation and Prospects (WESP) 2025”. The report has projected that India economy will grow by 6.6% in 2025, mainly driven by strong private consumption and investment growth.
- Indian economy is further expected to expand by 6.7% in 2026.
- The report revealed that Indian economy registered the growth rate of 6.8% in 2024.
- The report has projected that global economic growth rate will be at 2.8% (in 2025) and 2.9% (in 2026).
India-Specific Findings:
i.The report highlights that capital expenditure (capex) on infrastructure will significantly boost India’s economic growth in the coming years.
ii.The report underscored that strong export growth in services and certain categories, particularly pharmaceuticals and electronics,along with expansion in the manufacturing and services sectors will strengthen economic activity for India.
iii.The public sector in India continues to fund large-scale infrastructure projects, physical and digital connectivity, and social infrastructure, including improvements in sanitation and water supply. Strong investment growth is estimated to continue through 2025.
iv.Consumer price inflation in India is expected to decelerate from an estimated 4.8% (in 2024) to 4.3% (in 2025). This is in line with the Reserve Bank of India (RBI)’s 2 to 6% medium-term target range.
- Easing inflation has led most central banks to halt rate hikes or reduce policy rates in 2024. The RBI has kept its 6.5% policy rate unchanged since February 2023 due to ongoing inflation risks.
v.The United Nations (UN) estimates India’s growth rate at 6.6% for this FY 2025-26, slightly higher than the National Statistics Office (NSO) projection of 6.4% for 2024-25.
Note – National Statistics Office (NSO) is an Indian government agency under the Ministry of Statistics and Programme Implementation (MoSPI).
Key Findings Related to South Asia Region:
i.As per the report, South Asia Region(SAR) is expected to remain robust, with growth rate at 5.7% (in 2025) and 6.0% (in 2026).
- This growth is mainly driven by strong performance in India as well as economy recovery in countries like: Bhutan, Nepal,Pakistan and Sri Lanka.
- Pakistan and Sri Lanka are projected to see modest GDP growth of 3.4% and 4.0%, respectively.
- Bhutan and Nepal are expected to grow by over 5%, while Bangladesh’s economy may slow due to unrest and ongoing political uncertainty in mid-2024.
ii.The report observed that investment growth has remained strong particularly in East and South Asia region, partly supported by domestic and foreign investments in new supply chains in countries like: Indonesia, and Vietnam.
iii.The report has outlined certain challenges like: weaker external demand, persistent debt challenges, social unrest and political uncertainties in some countries may dampen the outlook for SAR.
Global Scenario:
i.The report has projected that global economic growth rate will be at 2.8% (in 2025) and 2.9% (in 2026). These projections are largely same from the rate of 2.8% registered in 2023 and estimated for 2024.
ii.The report highlighted that Global inflation has decreased from 5.6% (in 2023) to an estimated 4.0% (in 2024) and is expected to further decrease to 3.4% in 2025.
iii.The United States of America (USA) is expected to grow at 1.9% in 2025 and recover marginally to 2.1% in 2026 amid weaker labour market performance, modest income growth and cuts in public spending.
iv.As per the report, the growth rate of China is estimated at 4.9% for 2024 and is expected to decrease marginally by 10 basis points (bps) i.e. to 4.8% in 2025.
v.The Economic growth in the Least Developed Countries (LDCs) is projected to increase from 4.1% estimated for 2024 to 4.6% in 2025.
- While, the growth rate for Small Island Developing States (SIDS) is projected to increase by an average of 3.4% in 2025, decrease from 3.8% in 2024.
About United Nations Department of Economic & Social Affairs (UN-DESA):
Under-Secretary-General for Economic and Social Affairs – Li Junhua
Headquarters- New York, the United States of America (USA)
Establishment- 1948
