The UN World Economic Situation and Prospects Report 2025 projects that India’s GDP will grow 6.6% in 2025 after growing 6.9% in 2024. Private consumption, investment, and a rise in service and some manufactured commodity exports are expected to boost economic development in the world’s largest democracy.
The estimate predicts that South Asia’s GDP will grow by 5.7% in 2025, up from 5.9% in 2024, as a result of India’s remarkable success and the recovery of Bhutan, Nepal, Pakistan, and Sri Lanka. The risks to the economic outlook have been skewed to the downside by a decline in foreign demand, ongoing debt issues, and social upheaval in certain South Asian nations.
The study outlines the obstacles that developing nations encounter when attempting to raise financing for investments in human capital, technology, and essential infrastructure, as well as when attempting to move up the value chains for manufacturing and services. It continues by stating that it is anticipated that developed economies will continue to benefit disproportionately from technological advancements and the green shift.
It is anticipated that emerging nations will be more vulnerable to financial crises due to the continuation of high borrowing costs and problems with debt sustainability.
Economic growth in the least developed countries (LDCs) is forecast to be 4.6% in 2025, up from 4.1% in 2024, although it still lags well behind the 7% Sustainable Development Goals (SDG) target.
Although the recovery in international tourism is expected to assist LDC growth to some extent, conflicts and geopolitical challenges, particularly in Africa, may deter the investment needed for more robust economic expansion.
Furthermore, the rising foreign public debt puts many LDCs at grave risk of a debt crisis. While the rate for established economies is expected to decline from 4.8% in 2023 to 2.6% in 2024 and 2.2% in 2025, the rate for developing economies is expected to decline more gradually, from 7% in 2023 to 6% in 2024 and 5.1% in 2025.
For several emerging countries, double-digit inflation rates seen in 2024 are likely to persist into 2025.
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