World Economic Situation and Prospects-2025:
India’s GDP growth forecast for 2025 has been revised down to 6.3%, from the previous projection of 6.6%, in the mid-2025 update of the “World Economic Situation and Prospects” (WESP) report.
- The report is released by the United Nations Department of Economic and Social Affairs , in collaboration with UNCTAD and 5 UN regional commissions and it provides global and regional economic outlooks to support SDG-oriented, equitable growth policies.
Highlights:
- India’s GDP growth, though revised down to 6.3% in 2025 from 7.1% in 2024, remains the highest among major global economies and it is expected to reach 6.4% in 2026.
- Inflation, Monetary Policy, & Employment Outlook: Inflation is projected to decline from 4.9% in 2024 to 4.3% in 2025, remaining within the RBI’s 2–6% target range, reflecting effective monetary management.
- Unemployment remains broadly stable, though gender disparities in labour force participation continue to pose a structural challenge.
- Manufacturing GVA grew to Rs 27.5 lakh crore (2023–24). Total exports hit a record USD 824.9 billion in 2024–25 with services exports at USD 387.5 billion and non-petroleum merchandise exports at USD 374.1 billion.
- Defence exports value also increased around 3 times with India now exporting to nearly 100 countries, signaling rising global trust in Indian defence capabilities.
- Global GDP growth is projected to slow to 2.4% in 2025 (from 2.9% in 2024), and 2.5% in 2026, which spans both advanced and emerging economies.
- US growth is projected to fall due to tariffs and policy uncertainty, while China’s growth is estimated at 4.6% in 2025, impacted by weak demand, export disruptions, and real estate stress..
- Economies like Brazil, Mexico, and South Africa face downgrades driven by tepid trade, falling investment, and commodity price volatility.
- Growth in Least Developed Countries (LDCs) is projected to decline from 4.5% in 2024 to 4.1% in 2025, amid falling export revenues, tighter financial conditions, reduced Official Development Assistance (ODA), and rising debt distress risks.
- Food inflation, driven by climate shocks, currency depreciation, trade protectionism, and supply chain disruptions, remains above the headline inflation.
- Globally, 343 million people face acute food insecurity, with 1.9 million at famine risk in conflict zones like Gaza, Haiti, Mali, South Sudan, and Sudan.
- Countries like India, where food forms a large part of household spending, are worst affected.
Rising Trade & Global Risks: Rising US tariffs have triggered a “tariff shock”, raising global trade costs, disrupting supply chains, and disproportionately impacting developing economies. - The escalating trade tensions are weakening multilateralism and widening global inequality.
