The UN Trade and Development (UNCTAD) in its latest report titled 'Trade and Development Foresights 2025 - Under pressure: Uncertainty reshapes global economic prospects' has said that India is expected to grow by 6.5 per cent in 2025, slightly lower than the 6.9 per cent growth of 2024 but still maintaining its status as the fastest-growing major economy. The growth will be supported by continued robust public spending and ongoing monetary easing, even as the world economy is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty. It further said that the decision of the central bank to cut the interest rate by 25 basis points for the first time in five years in early February will support household consumption as well as provide a boost to private investment plans.
UNCTAD said that global growth is projected to slow to 2.3 per cent in 2025, placing the world economy on a recessionary path. The report cites mounting threats, including trade policy shocks, financial volatility and a surge in uncertainty that risk derailing the global outlook. It projects that the South Asia region will expand by 5.6 per cent in 2025, as declining inflation opens the way for monetary loosening across most of the region. It added nevertheless, food price volatility will remain a risk and complex debt dynamics will continue to burden economies such as Bangladesh, Pakistan and Sri Lanka.
The report said that the world economy is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty. Rising trade tensions are impacting global trade, with UNCTAD noting that recent tariff measures are disrupting supply chains and undermining predictability. It noted that trade policy uncertainty is at a historical high, and this is already translating into delayed investment decisions and reduced hiring. The slowdown will affect all nations, but UNCTAD remains concerned about developing countries and especially the most vulnerable economies. Many low-income countries face a ‘perfect storm’ of worsening external financial conditions, unsustainable debt and weakening domestic growth. UNCTAD underlines the real threat to economic growth, investment, and development progress, particularly for the most vulnerable economies.
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