In April 2025, Geneva (Switzerland)-based United Nations Conference on Trade and Development (UNCTAD) released its latest report titled ‘Trade and Development Foresights 2025- Under Pressure: Uncertainty Reshapes Global Economic Prospects’. The report has projected that the Indian economy will grow at 6.5% in Calendar Year (CY25) compared to estimated 6.9% growth rate in CY24.
- The report cited that this growth projection for CY25 is mainly driven by strong public spending and continuing monetary easing.
- Despite a slowdown in 2024, India is expected to be the fastest growing economy in the world.
Key Findings:
i.The report underscored that Reserve Bank of India (RBI)’s decision to reduce the policy rate by 25 basis points (bps) is expected to support household consumption and promote private investment in India.
ii.The report highlighted that public debt continues to increase in many, which resulted in increased net interest payments. It mentioned that developing countries like: Brazil, India, Mexico and South Africa have the highest interest payments.
iii.The report further showed that among 12 countries (in Group-20, G20 economies), 5 countries such as: India, Argentina, Australia, Indonesia and the Republic Korea (South Korea) are expected to reduce its general government net borrowing.
Global Scenario:
i.The report has projected that global growth will drop to 2.3% in 2025 compared to 2.8% growth rate in 2024.
- This growth projection for 2025 falls below the 2.5% threshold that indicates towards global recessionary phase, attributed by rising trade tensions and global uncertainty.
ii.As per the report, the South Asia region as a whole will grow by 5.6% in 2025, due to declining inflation which is further easing the monetary system across most of the region.
- But, food price volatility will continue to be a risk factor for the region and complex debt dynamics remains to burden economies such as: Bangladesh, Pakistan and Sri Lanka.
iii.UNCTAD report has also revised down the growth projections for major economies such as: China (from 5% to 4.4%), the United States of America (USA) (from 2.8% to 1%).
- While, the growth rate of the European Union (EU) is projected to increase marginally by 10 bps, from 0.9% to 1% over the same period.
About United Nations Conference on Trade and Development (UNCTAD):
Secretary-General- Rebeca Grynspan
Headquarters- Geneva, Switzerland
Established- 1964
