UN report: India will remain the fastest growing economy during the trade war, with a growth rate of 6.5%
New Delhi| India’s economy could grow at 6.5 percent in 2025 due to continued strong public spending and easy monetary policy. This is slightly down from the 2024 increase of 6.9 percent. Yet it will remain the fastest growing major economy.
A UN report said the world economy is on a recession path due to rising trade tensions and continued uncertainty. Global growth is projected to slow to 2.3 percent in 2025, which could plunge the global economy into recession, the United Nations Trade and Development (UNCTAD) said in a report released on Wednesday. The South Asia region will grow at 5.6 percent in 2025, as a drop in inflation opens the way for monetary easing in most parts of the region. Nevertheless, fluctuations in food prices will continue to be a risk for all countries.
Global trade is being affected by tariffs
UNCTAD said, the rising tariff war is affecting global trade. Supply chains are being disrupted. Forecasts are weakening. Trade policy has reached an uncertain historical high. This is resulting in delays in investment decisions and reduction in appointments. The report cites growing threats, including trade policy shocks, financial instability and increased uncertainty. This threatens to derail the global outlook.
Consumption will increase due to reduction in interest rates
UNCTAD estimates that the central bank’s decision in early February to cut the interest rate by 0.25 per cent for the first time in five years will support domestic consumption. Private investment schemes will also get a boost.
