While the global economy faces significant headwinds and weakening growth projections, India stands out as a beacon of economic resilience. According to the World Economic Situation and Prospects (WESP) report published on May 15, 2025, by the United Nations Department of Economic and Social Affairs, India is expected to be the fastest-growing large economy in the world, with a projected growth rate of 6.3 percent in 2025.
This forecast follows a similar projection made in April 2025 by the International Monetary Fund, which estimated India’s economy would expand by 6.2 percent in the current year and 6.3 percent in the next. These figures position India, the world’s fifth-largest economy, far ahead of the global average, which is expected to grow by just 2.4 percent in 2025. This divergence underlines India’s robust performance at a time when most developed and developing nations face economic challenges.
The WESP report attributes India’s economic momentum to several key drivers. “Resilient private consumption and strong public investment, alongside robust services exports, will support economic growth,” it noted. Moreover, the report projects a favorable outlook for inflation and employment in India. “Inflation is projected to slow from 4.9 per cent in 2024 to 4.3 per cent in 2025, staying within the central bank’s target range,” it stated.
India’s relatively strong economic performance comes in stark contrast to the global economic landscape, where widespread deceleration is forecast across regions. The WESP report highlights a grim projection for overall global growth, which is expected to decline from 2.9 percent in 2024 to 2.4 percent in 2025. According to Shantanu Mukherjee, Director of the Economic Analysis and Policy Division, “It’s been a nervous time for the global economy. In January this year, we were expecting two years of stable, if subpar growth, and since then, prospects have diminished.”
A range of factors are cited in the report for this global slowdown. Chief among them are escalating trade tensions and policy uncertainties, which have undermined investor confidence and dampened trade. The report observes that heightened tariffs—particularly in the United States—are increasing the effective tariff rate significantly. This is expected to strain international supply chains, push up production costs, delay essential investment decisions, and stir financial market instability.
The impact of these tariffs is expected to ripple across global markets. The report states, “While looming US tariffs weigh on merchandise exports, currently exempt sectors—such as pharmaceuticals, electronics, semiconductors, energy, and copper—could limit the economic impact, though these exemptions may not be permanent.”
Developing countries, in particular, are likely to bear the brunt of these trade disruptions. Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs, warned, “The tariff shock risks hitting vulnerable developing countries hard, slowing growth, slashing export revenues, and compounding debt challenges, especially as these economies are already struggling to make the investments needed for long-term, sustainable development.”
The WESP report further cautions that the bleak global economic outlook will hinder progress toward achieving the Sustainable Development Goals. The challenges are rooted in declining global trade, persistent inflationary pressures, and deteriorating growth. In particular, international trade is expected to slow markedly, with projected growth dropping from 3.3 percent in 2024 to just 1.6 percent in 2025. Furthermore, merchandise trade is forecast to shrink in the second half of 2025. These developments could negatively affect industries like transport, tourism, and various services that depend on robust global trade flows.
Adding to the global concerns, inflation remains a critical issue in many developing nations. In 2025, over 20 developing countries have experienced double-digit inflation rates. Food inflation has been especially pronounced, with averages exceeding 6 percent in regions such as Africa, South Asia, and Western Asia.
Despite the economic turbulence, the WESP report suggests that unemployment figures have remained relatively stable globally. “Unemployment remains largely stable amid steady economic conditions,” the report states. However, it also notes that long-standing gender disparities in employment persist, signaling a need for more inclusive labor market policies.
Looking ahead, investment growth globally is projected to be muted in 2025. This outlook is attributed to ongoing trade policy uncertainty, elevated interest rates, and fiscal limitations in many economies. The report underscores that low levels of investment could restrain future growth prospects. Compounding this concern is the role of emerging technologies, particularly Artificial Intelligence, which the report says could disrupt labor markets even further.
In response to these challenges, the WESP calls for coordinated strategic action from global policymakers. It emphasizes the importance of a balanced approach that incorporates monetary policy, fiscal strategies, supply-side reforms, and medium-term industrial policies. These combined efforts are seen as crucial for managing inflation, ensuring financial stability, and promoting inclusive economic growth.
The United Nations has also placed considerable hope in an upcoming global event to address these pressing economic issues. The Fourth International Conference on Financing for Development is scheduled to take place in Sevilla, Spain, from June 30 to July 3, 2025. This event is expected to serve as a pivotal forum to discuss and implement solutions aimed at strengthening multilateral cooperation, promoting debt sustainability, and advancing concrete actions toward financing sustainable development for all.
In summary, while the world grapples with an uncertain and deteriorating economic environment, India’s projected growth sets it apart as a leading light among major economies. Supported by strong domestic demand, steady investment, and controlled inflation, India may not only weather the global downturn but could also become an engine of global economic stability. Meanwhile, global leaders and policymakers are urged to take concerted action to navigate through the economic challenges and reorient growth toward a more inclusive and sustainable path.