India Retains Title as Fastest-Growing Large Economy

On 9th January 2025, the UN’s ‘World Economic Situation and Prospects 2025’ report projected India’s economy to grow at 6.6% in 2025, rising to 6.8% in 2026.

Key Points

Drivers of Growth: Strong exports, robust private consumption, and infrastructure capital expenditure are expected to propel India’s economic expansion.
Sectoral Highlights: Manufacturing and services sectors will continue to be primary contributors, supported by favourable monsoon-driven agricultural output.
Inflation and Employment: Consumer price inflation is projected to ease to 4.3%, while employment indicators remain strong with near-record labour force participation.
Regional Context: South Asia’s growth is pegged at 5.7% in 2025, with India leading recovery in the region. However, risks like debt challenges, climate hazards, and geopolitical tensions persist.