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UN Cuts India’s Growth Forecast for 2025 Amid Global Slowdown and Trade Uncertainty
New Delhi | May 16, 2025: The United Nations has revised down its growth forecasts for India for both 2025 and 2026, citing global trade tensions and policy uncertainty. According to the mid-year update of the World Economic Situation and Prospects 2025 report, India’s economy is now expected to grow at 6.3% in 2025 and 6.4% in 2026, down by 0.3 percentage points from earlier estimates.
The revised outlook aligns with the broader global economic slowdown, as the UN projects worldwide growth to decline to 2.4% in 2025 and 2.5% in 2026—a drop of 0.4 percentage points from January projections. The report attributes this slump to escalating U.S. tariffs, geopolitical instability, and policy volatility.
Despite the moderation, the UN emphasized that India remains one of the world’s fastest-growing large economies, driven by resilient domestic consumption, government spending, and robust services exports.
India’s latest trade data backs this, showing a widening merchandise trade deficit, but a growing services trade surplus, according to the Ministry of Commerce and Industry. This indicates that India’s services sector continues to outperform, helping buffer the economy against global headwinds.
The report also noted that sectors such as pharmaceuticals, electronics, semiconductors, energy, and copper—currently exempt from looming U.S. tariffs—could cushion the impact on Indian exports, although these exemptions may not be permanent.
Unemployment in India remains stable, but the report highlighted ongoing gender disparities in the workforce and called for greater inclusivity. Additionally, inflation is expected to decline from 4.9% in 2024 to 4.3% in 2025, staying within the Reserve Bank of India’s target range.
Globally, the UN painted a bleak picture, warning that falling consumer and business confidence, volatile financial markets, and supply chain disruptions are hampering economic momentum.
