In keeping with slower growth forecasted for the global economy as a result of increased trade tensions and policy uncertainty, the UN reduced its growth predictions for India by 30 basis points for the year 2025 to 6.3 percent.

Additionally, it lowered its 2026 forecast by 30 basis points to 6.4 percent.

The international organization did point out that, despite the anticipated slowdown, India's economy is still among the largest and fastest-growing in the world, thanks to strong government investment and solid consumer spending.

In light of growing trade tensions and policy uncertainty, the UN's World Economic Situation and Prospects (WESP) report for 2025 presented a cautious assessment of global economic prospects in its mid-year update.

According to the analysis, solid services exports, robust governmental investment, and resilient private spending would all contribute to economic development.

Global growth was predicted by the report to fall to 2.4 percent in 2025 and 2.5 percent in 2026, both of which were 0.4 percentage points lower than January's estimates.

 

Similar downgrades are being faced by emerging economies like South Africa, Mexico, and Brazil, whose outlooks are being dampened by weaker investment and falling commodity prices.

According to the research, trade tensions and policy uncertainty are on the rise, putting the world economy in a precarious position. 

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A significant rise in US tariffs, it continued, may raise manufacturing costs, interfere with international supply chains, and worsen financial instability.