India’s GDP growth to slow down at 6.3% in 2025, still among world’s fastest growing economies: UN

A United Nations report projects India’s economic growth to moderate to 6.3% in 2025, a slight decrease from previous forecasts, but still among the fastest-growing globally, driven by strong consumption and government spending. While exports face potential challenges from US tariffs, stable employment and declining inflation are expected. Globally, economic prospects are fragile due to trade tensions.

India’s economic growth is expected to moderate to 6.3% in 2025, down from 7.1% this year, according to a United Nations report released on Thursday.“Despite a projected moderation, India remains one of the fastest-growing large economies, supported by resilient consumption and government spending,” it said.India’s economy is now expected to grow by 6.3 per cent in 2025, a slight downgrade from the 6.6 per cent forecast made by the UN earlier in January. Growth is projected to edge up to 6.4 per cent in 2026.The mid-year update from the UN’s World Economic Situation and Prospects report for 2025, reflected a cautious picture of global economic prospects amid rising trade tensions and policy uncertainty.“India remains one of the fastest growing large economies, driven by strong private consumption and public investment, even as growth projections have been lowered to 6.3 per cent in 2025,” said Ingo Pitterle, senior economic affairs officer at the UN, quoted by PTI.

India’s Growth Prospects

It said that India’s economy, despite moderation, continues to rank among the fastest-growing major economies, driven by steady consumer demand and strong government spending. The economy will continue to expand due to strong household spending, solid government investment, and healthy growth in services exports.

Exports

While the country’s merchandise exports may come under pressure due to new US tariffs, sectors such as pharmaceuticals, semiconductors, electronics, energy and copper, those currently exempted may help cushion the impact, although these exemptions may not last.

Employment

Unemployment in the country has remained stable amid steady economic conditions, but the report warned that gender disparities in the workforce continue to be a major concern.

Inflation

On the inflation front, the UN projected a decline to 4.3% in 2025 from 4.9% in 2024 to 4.3% in 2025, well within the Reserve Bank of India’s target range. The RBI began cutting rates earlier this year.

Global outlook

Globally, the outlook is more sobering. The UN now expects world GDP to grow by just 2.4% in 2025, down from 2.9% in 2024 and a major slump from earlier forecasts.Emerging economies like Brazil, Mexico and South Africa are facing similar downgrades, with declining commodity prices and weakening investment dampening their outlooks.The report said that the global economy is in a fragile state, as trade tensions and uncertainty over policies continue to rise. It further added that a sharp increase in US tariffs could push up production costs, disrupting global supply chains, and increasing financial instability.“The tariff shock risks hitting vulnerable developing countries hard, slowing growth, slashing export revenues, and compounding debt challenges,” warned Li Junhua, UN under-secretary-general for economic and social affairs. “These economies are already struggling to make the investments needed for long-term, sustainable development.”