Projected Economic Growth Rate of India in 2025: 6.5%, According to UNCTAD
Chennai's Economic Outlook: The bustling city of Chennai stands on the brink of significant growth. According to the UN's trade and development body, India's economy is poised to expand by a robust 6.5% in 2025. A key factor driving this growth is the government's continued commitment to public spending and ongoing monetary easing.
The Reserve Bank of India's decision to slash interest rates by 25 basis points in early February will further support household consumption and boost private investment plans. However, it's important to note that the global economy is expected to grow at a subpar 2.3%, below the recessionary threshold of 2.5%. Indeed, global growth touched century-high levels of uncertainty.
South Asia's Growth Trajectory: India will lead the South Asia region, with its economy expanding by 5.6% in 2025. The declining inflation allows for monetary loosening across the region, promoting growth. However, food price volatility remains a concern, and complex debt dynamics will continue to burden economies like Bangladesh, Pakistan, and Sri Lanka.
Global Economy: On the other hand, the global economy is expected to slow down in 2025 and enter a recessionary phase. Despite a slightly stronger-than-expected growth performance of 2.8% in 2024, the world's GDP is set to expand by just 2.3% in 2025, below the threshold of 2.5% that marks a global recessionary phase. The global outlook for 2025 is clouded by heightened policy uncertainty.
Enrichment Insights: The projected growth rates for India and the global economy in 2025, according to UNCTAD and related UN sources, reflect a challenging economic outlook. While global economies face numerous adverse factors, India stands out as a significant standout among developing economies, thanks to its strong export performances and growing digital and manufacturing investments.
Interestingly, India's digital services investments are growing rapidly at an annual rate of 10-12%, faster than global GDP growth. Moreover, India's manufacturing sector, particularly in semiconductor and basic metals projects, is also contributing to growth supported by steady greenfield project announcements. In terms of trade performance, India's export growth continues to outpace other major global economies. In 2024-25, India's overall exports reached a record $824.9 billion, increasing by 6.01% over the previous year.
In conclusion, while UNCTAD projects a challenging global economic environment for 2025, India is well-positioned for comparatively stronger growth, thanks to its dynamic digital economy, manufacturing sector, and export growth leadership among major economies.
- In the dynamic business landscape of India, the continuation of public spending and monetary easing by the government will likely boost the financial sector, further supporting household consumption and private investment plans.
- As India's digital services investments grow at an annual rate of 10-12%, faster than global GDP growth, and its manufacturing sector continues to expand, especially in semiconductor and basic metals projects, the finance industry is expected to thrive, contributing significantly to the country's overall economic growth.
