India's Economic Growth Expected To Moderate To 6.6% In 2025: UN Report
Date
1/10/2025 2:16:12 PM
(MENAFN- KNN India)
New Delhi, Jan 10 (KNN) India's economic growth is projected to ease to 6.6 percent in calendar year 2025, down from an estimated 6.9 percent in 2024, according to the World Economic Situation and Prospects report released by the United Nations.
The report forecasts a slight improvement to 6.7 percent growth in 2026, though this would mark three consecutive years of sub-seven percent expansion following a strong post-pandemic recovery that saw 8 percent growth in 2023.
Nagesh Kumar, Former Director, United Nations Economic and Social Commission of Asia and the Pacific (UNESCAP) and current member of the Reserve Bank of India's Monetary Policy Committee, attributes the earlier high growth rates to pent-up demand following the Covid-19 slowdown.
The economy has now returned to its pre-pandemic trajectory, as evidenced by the unexpected decline to a seven-quarter low of 5.4 percent growth in the July-September 2024 period, primarily due to weak manufacturing performance.
Kumar points to sluggish private investment as a key factor in the economic deceleration, suggesting that high interest rates may be deterring business expansion.
The National Statistics Office's recent data indicates that GDP growth for the financial year ending March 2025 is expected to decrease to 6.4 percent from 8.2 percent in the previous fiscal year, though Kumar anticipates improved performance in the second half that could push the overall FY2024-25 growth to approximately 6.5 percent.
Despite this moderation in growth rates, India is positioned to maintain its status as the world's fastest-growing major economy.
The UN report maintains its global growth forecast at 2.8 percent for 2025, unchanged from 2024, with potential upside from declining inflation and monetary easing in various economies.
However, significant challenges persist, including geopolitical conflicts, trade tensions, and high borrowing costs, particularly affecting low-income nations and potentially hindering progress toward Sustainable Development Goals.
(KNN Bureau)
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