World economy: Growth to remain muted at 2.8%, but India to be the fastest at 6.6% in 2025
Virendra Pandit
New Delhi: The United Nations has warned that global economic growth will remain subdued at 2.8 percent in 2025, the same as in 2024, because of the continuing uncertainties the world over, but India will be the fastest-growing economy.
South Asia will remain the fastest-growing region, with a predicted 5.7 percent growth, led by India’s 6.6 percent expansion, a UN report said.
In its latest World Economic Situation and Prospects (WESP) 2025 report, the world body said on Thursday that while the global economy has shown resilience against multiple shocks, growth is still below the pre-pandemic average of 3.2 percent, according to media reports.
Listing factors affecting it, the UN said weak investment, slow productivity, and high debt levels are holding back progress.
Lower inflation and easier monetary policies in many countries could provide a small boost to economic activity in 2025. However, risks such as ongoing geopolitical conflicts, rising trade tensions, and high borrowing costs continue to create uncertainty, it said.
These challenges are especially severe for low-income and vulnerable countries, where fragile growth hinders progress toward Sustainable Development Goals (SDGs), the media reported on Friday.
UN Secretary-General Antonio Guterres emphasized the need for collective action, saying, “In our interconnected economy, shocks on one side of the world push up prices on the other. Every country is affected and must be part of the solution. Together, let’s make 2025 the year we put the world on track for a prosperous, sustainable future for all.”
The report said that growth trends across regions show varying trajectories for 2024 and 2025.
In the United States, it is projected to slow from 2.8 percent in 2024 to 1.9 percent in 2025 because of a weaker labor market and reduced consumer spending.
Europe might see a modest recovery, with growth improving from 0.9 percent to 1.3 percent, supported by easing inflation and robust labor markets.
Africa’s growth may rise from 3.4 percent in 2024 to 3.7 percent in 2025, supported by recoveries in key economies like Egypt, Nigeria, and South Africa, though challenges such as conflicts and climate issues persist.
And, East Asia is expected to grow at 4.7 percent, driven by China’s steady 4.8 percent growth and strong private consumption.
Global trade is likely to grow by 3.2 percent in 2025, slightly down from 3.4 percent in 2024. However, tensions in trade policies and geopolitical uncertainties pose risks.
Inflation is projected to decline from 4 percent in 2024 to 3.4 percent in 2025, offering some relief to households and businesses. Central banks are likely to cut interest rates further as inflation eases.
However, many developing countries may still face high inflation, with one in five experiencing double-digit rates, the report added
