World Economic Situation and Prospects Report 2025

January 11, 2025

The Indian economy is projected to grow by 6.6 per cent in 2025, according to the United Nations’ World Economic Situation and Prospects report. This growth is supported by strong private consumption and investment. The report maintains its previous growth forecast, reflecting confidence in India’s economic resilience. The public sector plays important role in funding infrastructure projects. These projects enhance physical and digital connectivity and improve social infrastructure, including sanitation and water supply.

Infrastructure Investment and Economic Impact

The UN report emphasises the importance of capital expenditure on infrastructure. Such investment is expected to yield strong multiplier effects on economic growth. Infrastructure development is crucial for enhancing productivity across various sectors. The manufacturing and services sectors are anticipated to expand, contributing to overall economic activity. Strong export growth in service industries and specific goods categories, such as pharmaceuticals and electronics, will further stimulate the economy.

Agricultural Growth Expectations

Favourable monsoon rains in 2024 have positively impacted agricultural output. Improved summer-sowing areas for major crops are expected to boost production in 2025. Agricultural growth will contribute to the overall economic performance of India. Enhanced agricultural productivity can support rural incomes and consumption.

Regional Economic Outlook

The economic growth forecast for South Asia remains robust, primarily driven by India. The region is projected to grow at 5.7 per cent in 2025 and 6 per cent in 2026. India’s performance is crucial for the region’s overall economic health. The interconnected nature of economies in South Asia amplifies the impact of India’s growth on its neighbours.

Risks to Economic Growth

Despite positive growth projections, several risks threaten the outlook. Possible escalation of geopolitical tensions could disrupt economic stability. A deceleration in external demand may negatively impact exports. Ongoing debt challenges and potential social unrest could hinder progress. Additionally, the region’s vulnerability to climate hazards poses risks to sustained growth.

António Guterres is the UN Secretary-General.
The Reserve Bank of India (RBI) projected 6.6% growth for 2024-25.
South Asia’s growth is heavily reliant on India’s economic performance.
The agricultural output is expected to improve due to favourable monsoon rains.
Infrastructure investment is linked to strong multiplier effects on growth.

Conclusion on Economic Resilience

The Indian economy’s resilience is evident in the face of global challenges. The commitment to infrastructure development and strong sectoral performance will be vital for future growth.

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