UN: India to remain the fastest-growing major economy in the world

According to the World Economic Situation and Economic Prospects mid-2025 report of the United Nations, india remains the fastest-growing economy in the world in 2025 and 2026.

The report, released on 15th May 2025, expects the Indian economy to grow by 6.3 % in 2025 and 6.4 % in 2026. The UN report forecast is based on the calendar year (January- December), while the government of India follows April to March as an accounting period for national accounts.

The International Monetary Fund (IMF) has recently forecasted a growth rate of 6.2 % in fiscal year 2025-26 and 6.3%  in fiscal year 2026-27 for the Indian economy 

World Economy in a Precarious Moment 

The report said that the world economy is facing a precarious moment due to the unprecedented tariffs announced by American President Donald Trump on China, Canada, the European Union, and other countries.

These tariffs have created global uncertainty, likely to slow world economic growth. 

In 2024, the contribution of the merchandise trade (export and import of goods) to world economic output was 22.2%.

The United States contributed 14% to global imports, China 10%, and Germany 6 %.

Any disruption in trade between the United States and the rest of the world will significantly risk the global growth rate.

• The report forecast a global growth rate of 2.4% in 2025 and 2.5 % in 2026..
• It expects the United States economy to grow by 1.6 %, China by 4.6 %, Japan by 0.7%, and the  European Union by 1 %.
• The world’s third-largest economy, Germany, will experience a negative growth rate of 0.1 % in 2025.

UN report on India

• The growth rate in India will be supported by strong public investment and private consumption.
• The strong service sector export will also aid the Indian economic growth rate.
• The report expects moderate inflation in India of 4.3 % in 2025, a decline of 4.9 % from 2024.
• The report forecasts that the unemployment rate in the country will be stable.

Risk

• The report highlights the risk faced by the Indian export sector due to the American tariff threat, which could adversely affect the economic growth rate.

About the World Economic Situation and Economic Prospects

The World Economic Situation and Economic Prospect is the United Nations' flagship publication on the state of the world’s economy.

It is prepared by the Global Economic Monitoring Branch in the Economic Analysis and Policy Division of the United Nations Department of Economic and Social Affairs.

The Global Economic Monitoring Branch monitors and analyses global economic trends and prospects and their implications for the implementation of the 2030 Sustainable Development Goal Agenda.

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IMF slashes India’s growth rate forecast to 6.2 % for FY 26