India’s Economy Projected To Grow 6.6% In 2025: UN Report

India's economy is expected to grow by 6.6 per cent in 2025, following an estimated expansion of 6.9 per cent in 2024, according to the UN’s World Economic Situation and Prospects Report 2025. The report highlights that private consumption, investment, and strong export growth in services and certain manufactured goods will be key drivers of economic activity in the country.

South Asia's economic outlook remains strong, with regional GDP projected to grow by 5.7 per cent in 2025, slightly down from 5.9 per cent in 2024. This growth is largely attributed to India's robust performance, along with economic recovery in Bhutan, Nepal, Pakistan, and Sri Lanka. However, the report notes that risks to the region's economic outlook are skewed to the downside due to external demand deceleration, ongoing debt challenges, and social unrest in parts of South Asia.

The report also addresses challenges faced by developing nations in securing financing for essential infrastructure, technology, and human capital investments, as well as advancing in manufacturing and services value chains. It warns that the benefits of the green transition and technological advancements are expected to be concentrated in developed economies.

High borrowing costs and ongoing debt sustainability issues are anticipated to continue, leaving many developing economies vulnerable to debt distress. Economic growth in the least developed countries (LDCs) is projected to increase to 4.6 per cent in 2025, up from an estimated 4.1 per cent in 2024, though it still falls short of the 7 per cent target set by the Sustainable Development Goals (SDGs).

While international tourism recovery is expected to support LDC growth, conflicts and geopolitical tensions, particularly in Africa, could hinder investment needed for stronger economic expansion. Rising external public debt poses significant risks for many LDCs, leaving them at heightened risk of debt distress.

Inflation rates are also expected to diverge, with developed economies experiencing a decrease from 4.8 per cent in 2023 to 2.6 per cent in 2024 and 2.2 per cent in 2025. In contrast, inflation in developing economies is forecast to decrease more gradually, from 7 per cent in 2023 to 6 per cent in 2024 and 5.1 per cent in 2025. The report further indicates that double-digit inflation rates recorded in several developing countries in 2024 are likely to persist into 2025.

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