India remains fastest-growing economy at ‘precarious moment’ for world: UN

United Nations: India remains the fastest-growing large economy and is expected to record a 6.3 per cent growth this fiscal year, while the global economy faces a “precarious moment,” according to the UN.

“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” from the 6.6 per cent made in January, Ingo Pitterle, a senior economic affairs officer, said on Thursday.

The UN’s mid-year update of the World Economic Situation and Prospects (WESP) report said India’s economy is projected to grow a tad faster next year at 6.4 per cent, even though it is also 0.3 per cent lower than the January projection.

“The world economy is at a precarious moment,” the report warned.

“Heightened trade tensions, along with policy uncertainty, have significantly weakened the global economic outlook for 2025.”

“It’s been a nervous, time for the global economy,” Shantanu Mukherjee, the director of the Economic Analysis and Policy Division, said at the release of the WESP.

“In January this year, we were expecting two years of stable, if subpar growth, and since then, prospects have diminished,” he added.

Against this picture, the growth of the world’s fifth-largest economy, India, contrasts with the global rate of 2.4 per cent this year, and that of other major economies, according to the WESP.

The projection for China is 4.6 per cent, for the US 1.6 per cent, Germany (negative) -0.1 per cent, Japan 0.7 per cent, and the European Union 1 per cent.

“Resilient private consumption and strong public investment, alongside robust services exports, will support economic growth” for India, the report said.

On inflation and employment, the WESP saw positive trends for India.

“Inflation is projected to slow from 4.9 per cent in 2024 to 4.3 per cent in 2025, staying within the central bank’s target range,” it said.

“Unemployment remains largely stable amid steady economic conditions,” it said, but added a note of caution that “persistent gender disparities in employment underscore the need for greater inclusivity in workforce participation”.

The WESP drew attention to the risks to the export sector from the US tariff threats.

“While looming US tariffs weigh on merchandise exports, currently exempt sectors — such as pharmaceuticals, electronics, semiconductors, energy, and copper — could limit the economic impact, though these exemptions may not be permanent,” it said.

The International Monetary Fund last month projected India’s economy to grow by 6.2 per cent this year and 6.3 per cent next year.

–IANS