India to remain world’s fastest-growing major economy with 6.6 per cent growth in 2025
NEW DELHI : India is poised to retain its position as the world’s fastest-growing large economy, with a projected GDP growth rate of 6.6 per cent in 2025, according to the World Economic Situation and Prospects 2025 (WESP) Report released by the United Nations on Thursday (9 January).
Hamid Rashid, UN Head of Global Economic Monitoring, highlighted India’s robust economic trajectory, emphasising, “India would again be the fastest growing large economy in the world.”
Key Projections
The report forecasts India’s economy to grow slightly faster at 6.8 per cent in 2026, following a robust 6.6 per cent growth in 2025.
The sustained growth is attributed to strong private consumption and investments, bolstered by capital expenditure on infrastructure, which is expected to yield significant multiplier effects in the coming years.
Additionally, the report highlights India’s strong export performance, particularly in pharmaceuticals, electronics, and services, as key contributors to economic expansion.
Manufacturing and services sectors are also expected to play a pivotal role in driving growth during the forecast period.
Agricultural and Investment Gains
A favourable monsoon in 2024 has enhanced agricultural output expectations for 2025, with increased summer-sown crop areas.
Investment growth remains robust in South Asia, driven by domestic and foreign investments in supply chains, particularly in India, Indonesia, and Vietnam.
Inflation and Employment Trends
Consumer price inflation is projected to decline from 4.8 per cent in 2024 to 4.3 per cent in 2025, comfortably within the Reserve Bank of India’s target range of 2–6 per cent.
Employment indicators have remained strong, with labour force participation near record highs. Urban unemployment stood at 6.6 per cent in 2024, marginally lower than 6.7 per cent in 2023.
Global and Regional Context
Global economic growth is forecast to remain steady at 2.8 per cent in 2025, with modest improvement to 2.9 per cent in 2026.
However, China’s growth is expected to moderate to 4.8 per cent in 2025 due to a shrinking population and rising trade tensions, threatening its medium-term prospects.
The UN cautions that risks to India’s growth remain, including geopolitical tensions, slowing external demand, and vulnerability to climate hazards.
The projections from the UN came as the first advance estimates project India’s GDP growth for FY25 at 6.4 per cent, the lowest in four years, though still a global standout.