India Leads Global Growth with 6.3% GDP in 2025: UN Report
India has been projected to be the fastest-growing major economy in 2025, with a GDP growth rate of 6.3%, according to the United Nations’ mid-year World Economic Situation and Prospects (WESP) report. While the projection has been slightly revised down from the earlier 6.6%, it still places India ahead of China (4.6%), the United States (1.6%), the European Union (1%), and Japan (0.7%).
The report highlights India’s robust domestic demand, resilient services sector, and continued public capital expenditure as key contributors to this momentum. Despite global headwinds like elevated borrowing costs and trade disruptions, India’s internal economic engines remain strong.
Inflation and Monetary Policy Outlook
The UN report notes a positive trend in India’s inflation trajectory. Consumer price inflation is expected to ease from 4.9% in 2024 to 4.3% in 2025. This downward trend has allowed the Reserve Bank of India (RBI) to pivot towards a more accommodative monetary stance, reducing the policy rate to 6% early in the year.
Lower inflation and relaxed interest rates are anticipated to boost both household consumption and business investment, further supporting India’s growth story.
Employment and Structural Challenges
India’s unemployment rate is reported at 5.1% in April 2025, reflecting a stable labour market. However, the report also flags enduring gender disparities in employment participation. It recommends policy interventions to enhance women’s workforce inclusion and address structural barriers that limit equitable job access.
The services sector remains a primary driver of employment, while manufacturing and rural labour markets continue to face volatility, particularly due to external shocks and climate-related events.
India Shines Amid Global Economic Slowdown
The global economy is forecasted to grow at a sluggish 2.4% in 2025, a decline from 2.9% in 2024. The slowdown is attributed to geopolitical conflicts, uncertain fiscal policies, and trade fragmentation. In contrast, India’s resilient growth stands out as a rare bright spot, providing a counterweight to the global economic gloom.
This robust performance underscores the effectiveness of India’s fiscal consolidation, structural reforms, and targeted welfare schemes. It also positions India as a reliable growth engine for the global economy, particularly as multinational firms look to diversify supply chains away from China.
