(MENAFN- IANS) New Delhi, Jan 9 (IANS) India's Economy is projected to grow by 6.6 per cent in 2025, following an estimated expansion of 6.9 per cent in 2024, largely driven by private consumption and investment, according to the UN World Economic Situation and Prospects (WESP) 2025 report released on Thursday
Additionally, India's strong export growth in services and certain manufactured goods will bolster economic activity, the UN flagship economic report further states.
On the other hand, "the Chinese economy is expected to continue the trend of a gradual moderation amid tepid household consumption, lingering property sector weakness and rising trade tensions. Growth is projected to be at 4.8 per cent in 2025, compared to an estimated 4.9 per cent in 2024", the report states.
The UN report projects that global growth will remain at 2.8 per cent in 2025, unchanged from 2024. While the world economy has demonstrated resilience, withstanding a series of mutually reinforcing shocks, growth remains below the pre-pandemic average of 3.2 per cent, constrained by weak investment, sluggish productivity growth, and high debt levels, it added.
The report notes that lower inflation and ongoing monetary easing in many economies could provide a modest boost to global economic activity in 2025. However, uncertainty still looms large, with risks stemming from geopolitical conflicts, rising trade tensions and elevated borrowing costs in many parts of the world. These challenges are particularly acute for low-income and vulnerable countries, where sub-par and fragile growth threatens to further undermine progress towards the Sustainable Development Goals (SDGs).
“Countries cannot ignore these perils. In our interconnected economy, shocks on one side of the world push up prices on the other. Every country is affected and must be part of the solution - building on progress made," United Nations Secretary-General Antonio Guterres said in the foreword to the report. "We've set a path. Now it's time to deliver. Together, let's make 2025 the year we put the world on track for a prosperous, sustainable future for all."
The UN report also points out that East and South Asia face mounting downside risks that could dampen economic prospects. Key risks and challenges include escalating geopolitical tensions, trade disputes, and the impact of climate change, which could reignite inflationary pressures and pose severe risks to food security. Additionally, protracted weakness in China's property market and high levels of public and external debt across many South Asian countries could further strain economic stability.
In response to these risks and challenges, governments across East and South Asia have implemented tailored policies. Easing inflation prompted many central banks in the region to lower interest rates in 2024. A few monetary authorities, however, remained cautious due to country-specific concerns such as volatile food prices and elevated debt levels.
On the fiscal front, countries in the region are focusing on regaining fiscal space and supporting economic activity through strategic public spending and reforms, the report added.
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