UN Report: India’s economic steamroll continues even as the world outlook grows gloomy. India is poised to grow at 6.3% during the current financial year, retaining its status as the fastest-growing large economy, a mid-year United Nations report says. The growth is being underpinned by robust consumer spending, steady government expenditures, and increasing service exports, even as it shaved off the earlier projection of 6.6%.
Solid Growth Amid Global Uncertainty
The UN’s World Economic Situation and Prospects report depicts a bleak scenario for the world economy, blaming policy uncertainty and rising trade tensions. The case is different for India with its strong fundamentals. As the world forecast falters, India’s performance shows no wavering with a mere marginal downgrading. The UN projects 6.4% growth for India in the forthcoming financial year, marginally less than previous predictions.
India Leads Major Economies to the Finish Line
India’s 6.3% growth puts it way ahead of the rest of the economic giants. China will grow at 4.6%, the US by a mere 1.6%, while Japan and the European Union lag further behind at 0.7% and 1% respectively. Germany is forecast to experience negative growth of -0.1%. India’s domestic drivers, especially household consumption and services exports, have been major contributors to this.
Inflation, Employment, and Risk Factors
The report has some positive news on inflation, which is estimated to fall from 4.9% this year to 4.3% in 2025, remaining within the Reserve Bank of India’s comfort zone. The numbers for employment are generally steady, although the UN emphasizes the necessity to fill the gender gap in the labor force. The risk side is headed by the threat of additional US tariffs targeting India’s exports. But industries such as pharmaceuticals, electronics, energy, and copper — which are exempted from such charges now — can potentially cushion any blow, at least in the short term.
Echoes from the IMF
The International Monetary Fund too has come out with a similar assessment, forecasting India’s growth at 6.2% for the current year and 6.3% for the next one. Combined with the UN’s report, these projections give a boost to faith in India’s economic resilience amidst global uncertainty.
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