India to grow fastest this year too, global economy sluggish

New Delhi| The Indian economy will continue to grow at the fastest pace in the world this year also. However, the global economic situation will remain weak. India’s economic growth is expected to remain strong despite some signs of slowdown, the World Economic Forum (WEF) said in a report. In contrast, the global economy may face significant challenges in 2025.

The report, prepared on the basis of assessments by leading economists around the world, says that South Asia continues to be ahead in terms of growth. 61 percent of chief economists believe South Asian GDP will remain strong or very strong this year. This performance in this sector is largely the result of strong growth in India. India remains the fastest growing major economy in the world.

Also, according to the National Statistical Office (NSO), India’s economic growth rate declined to a near two-year low of 5.4 percent in the third quarter of the current financial year. This is less than RBI’s estimate.

The outlook for China is no better amid declining consumer demand and weak productivity, the World Economic Forum said. China’s growth rate will gradually slow down in the coming years. The outlook for Europe remains gloomy. 74% of economists anticipate weak or very weak growth this year. The US economy is expected to see strong growth this year. Recent figures of employment and inflation also support this.

Industry body FICCI has reduced India’s growth rate estimate for the current financial year from 7 per cent to 6.4 per cent. The latest estimate by the Federation of Indian Chambers of Commerce and Industries (FICCI) is significantly lower than the growth rate recorded in 2023-24. In the last financial year, the GDP growth rate was 8.2 percent. FICCI said, the policies of US President-elect Donald Trump will have a short-term impact on the Indian economy.

According to the report, 56 per cent of chief economists have predicted a weak state of the global economy. Only 17 per cent of economists expect an improvement, which explains the growing uncertainty in key areas and the need to take policy steps as needed worldwide.

48 per cent of economists forecast growth in global trade in volume terms this year. This shows the strength in global trade. However, most economists fear increasing tensions over trade between major countries. The main reason for this is to give priority to protectionism.