UN report: Indian economy to grow 6.6% in 2025, 6.7% in 2026

The United Nations flagship report “ World Economic Situation and Prospects 2025” has predicted that the Indian economy is likely to grow by 6.6% in 2025 and 6.7 % in 2026. The report which was released by the United Nations on 9 January 2025, expects the world economy to grow by 2.8 % in 2025.

The United Nations follows calendar years (January-December) while the Indian government follows a fiscal year April - March national accounting method.

The National Statistical Office (NSO) in its first advance estimates of gross domestic product (GDP) for the fiscal year 2024-25 has estimated a GDP growth of 6.4%. In 2022-23 the growth rate of the Indian GDP was 7% and in 2023-24 it was 8.2%. 

Highlights of the United Nations Report

• Economic growth in the South Asian region is expected to remain strong in 2025 due to the strong performance of the Indian economy.  The region is expected to grow by 5.7 percent in 2025 and 6 percent in 2026.
• The Indian economy is expected to grow by 6.6% in 2025 and by 6.7% in 2026.
• The world economy is expected to grow by 2.8 percent in 2025.

Reason for strong growth in the Indian economy

• Increased focus of the government on capital expenditure on infrastructure development will have strong multiplier effects on growth in the coming years. 
• Strong growth in the manufacturing and services sectors 
• Strong export growth in services especially in pharmaceutical and electronics.
• Good monsoon in 2024 is expected to boost the agricultural output in 2025.

Danger for the Indian Economy

• Possible escalation of geopolitical tensions in West Asia or Ukraine,
• Slowdown in the world economy which can adversely affect India’s exports,
• Extreme climate events like drought or floods.
• Social unrest within the country.

Projected India's GDP Growth Rate in 2024-25/2025-26

Following are the forecasts of various global and Indian financial agencies regarding the growth of the Indian economy (as of 10 January 2025).