• The United Nations Department of Economic and Social Affairs (DESA) launched a report titled ‘The World Economic Situation and Prospects as of mid-2025’.

• 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 DESA. 

• The report provides a comprehensive assessment of the global economy’s current state and outlook, drawing on extensive data and analysis to inform policymakers worldwide.

• India remains one of the fastest growing large economies, driven by strong private consumption and public investment.

• India’s economy is forecast to grow by 6.3 per cent in 2025. 

• In contrast, other major economies are expected to grow at much slower rates. 

• China, grappling with a real estate crisis and weak consumer confidence, is projected to expand at 4.6 per cent in 2024. 

• The United States, facing persistent inflation and high interest rates, is forecast to grow at 1.6 per cent, while the European Union is expected to see just 1 per cent growth, with Germany potentially slipping into a mild contraction (-0.1 per cent). 

What the report says about India?

• The 6.3 per cent growth projection for India in 2025 is slightly lower than the 6.6 per cent estimated in the UN World Economic Situation and Prospects 2025 published in January this year. GDP growth for India for 2026 is projected to be 6.4 per cent. 

• Resilient private consumption and strong public investment, alongside robust services exports, will support economic growth.

• In India, unemployment remains largely stable amid steady economic conditions, though persistent gender disparities in employment underscore the need for greater inclusivity in workforce participation. 

• Inflation in India is projected to slow from 4.9 per cent in 2024 to 4.3 per cent in 2025, staying within the central bank's target range.

• Declining inflation has allowed most of the South Asian region’s central banks to commence or continue monetary easing in 2025. 

• The report noted that the Reserve Bank of India, which had kept its policy rate steady at 6.5 per cent since February 2023, began its easing cycle in February 2025. Meanwhile, governments in Bangladesh, Pakistan and Sri Lanka are expected to continue fiscal consolidation and economic reforms under IMF-supported programs.

Global scenario

• The world economy is at a precarious moment. Heightened trade tensions, along with policy uncertainty, have significantly weakened the global economic outlook for 2025. 

• Higher tariffs — resulting in a significant increase in the effective tariff rate in the United States — are likely to strain global supply chains, drive up production costs and delay critical investment decisions, while also contributing to financial market volatility. 

• 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 downward revisions in growth forecasts are broad-based, affecting both developed and developing economies. 

• Weakening global trade growth and investment flows are compounding the slowdown. 

• Many trade-reliant developing countries face mounting challenges from reduced exports, lower commodity prices, tighter financial conditions, and elevated debt burdens.

• Inflation is easing globally, but short-term risks from tariff-driven cost pressures and uncertainty are adding to policy challenges. 

• Addressing them requires a broad toolkit that combines monetary policy, fiscal measures, supply-side reforms, and industrial strategies to stabilise prices and foster resilience.

• The deteriorating economic outlook is further undermining progress toward the Sustainable Development Goals, many of which are already off track. 

• Slower growth and persistent cost-of-living pressures risk deepening inequalities, disproportionately burdening low-income households and vulnerable populations. 

• Meanwhile, persistent weakness in global investment growth drags down long-term economic prospects.

(The author is a trainer for Civil Services aspirants.)