India Emerges As Economic Outlier As Global Growth Outlook Dims To 2.4%

The UN’s mid-year update of the World Economic Situation and Prospects projects India’s growth at 6.3 per cent in the current fiscal year, the highest among large economies. This momentum is expected to continue into 2026, with growth estimated at 6.4 per cent

At a time when the global economy is facing what the United Nations calls a "precarious moment", India has emerged as a rare bright spot.

The UN’s mid-year update of the World Economic Situation and Prospects projects India’s growth at 6.3 per cent in the current fiscal year, the highest among large economies. This momentum is expected to continue into 2026, with growth estimated at 6.4 per cent.

In contrast, the global outlook remains subdued amid rising trade tensions, policy uncertainty, and a decline in cross-border investments.

Global economic growth is now projected to slow to 2.4 per cent in 2025, down from 2.9 per cent in 2024, and 0.4 percentage points below the January forecast, the report states.

Amid global headwinds, India stands out not just for its headline growth figures but for the depth and breadth of its progress, from buoyant capital markets and robust manufacturing to record-breaking exports and a fast-expanding defence sector. These gains are rooted in sound policy choices, strong domestic demand and growing global confidence in India’s economic trajectory.

The report released in mid-2025 updates the earlier World Economic Situation and Prospects 2025, which came out on January 9, 2025. It is prepared by the Global Economic Monitoring Branch within the Economic Analysis and Policy Division of UN's Department of Economic and Social Affairs (DESA).

India’s growth is being driven by strong domestic demand and consistent government spending. These factors have supported stable employment and helped contain inflation, which is expected to fall to 4.3 per cent in 2025, staying within the Reserve Bank of India’s target range.

Financial markets are also reflecting this optimism. Stock indices have shown solid gains, backed by sustained investor confidence. Manufacturing activity is picking up, helped by favourable policies and resilient external demand. Exports, especially in strategic areas like defence production, are expanding steadily. Together, these indicators show that India’s economy is not only holding firm but also making headway in an uncertain global environment.

India’s capital markets have played a key role in driving economic growth. By channelling domestic savings into investments, they have strengthened the financial system. As of December 2024, the stock market hit record highs. It outperformed many emerging markets despite geopolitical tensions and domestic uncertainties.