U.N. cuts India’s 2025 growth forecast to 6.3% from 6.6%, in line with slowing global growth

The U.N.’s mid-year update of its World Economic Situation and Prospects 2025 report has projected global growth to slow to 2.4% in calendar year 2025. File.
| Photo Credit: Reuters

The United Nations has lowered its growth projections for India for this year and the next, to 6.3% and 6.4%, respectively. These are both 0.3 percentage points lower than its earlier projections. This is also in line with the slower growth projected for the global economy due to heightened trade tensions and with policy uncertainty.

The U.N.’s mid-year update of its World Economic Situation and Prospects 2025 report released on Friday (May 16, 2025) has projected global growth to slow to 2.4% in calendar year 2025 and to 2.5% in 2026, both of which are lower by 0.4 percentage points than the projections made in January.

For India, as well, the data is based on calendar years rather than financial years, which is what India uses. The report also noted that, despite uncertainties on account of trade and tariff discussions, India can remain reasonably resilient. 

“Despite a projected moderation, India remains one of the fastest-growing large economies, supported by resilient consumption and government spending,” the report noted. 

The report also noted that “robust services exports” will also support economic growth. This is in line with the latest government data as well. According to data released by the Ministry of Commerce and Industry on Thursday, while India’s merchandise trade deficit widened in April, so did its services trade surplus — basically meaning that services exports were extending their lead over services imports. 

“While looming United States 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,” it added.

The report further said that unemployment in India “remains largely stable amid steady economic conditions”, but highlighted persistent gender disparities in employment and the need for greater inclusivity in workforce participation.

“In India, inflation is projected to slow from 4.9% in 2024 to 4.3% in 2025, staying within the central bank’s target range,” the report added.

On global growth, the United Nations portrayed a dismal picture, saying that the global growth outlook “has deteriorated significantly” since the January 2025 forecast. 

“Sweeping United States tariff announcements and counter-announcements, along with heightened policy uncertainty have eroded global growth prospects, already weaker than the pre-pandemic trend due to high debt levels, sluggish productivity growth and geopolitical tensions,” it said.

It further said that declining consumer and business confidence, increased financial market volatility, and potential disruptions in manufacturing and supply chains are weighing on economies worldwide.