India's Economic Surge: Projections and Challenges for 2025

The Indian economy is projected to grow by 6.6% in 2025, driven by private consumption and investment, as per a UN report. Strong performance in agriculture and exports bolsters economic activity, while inflation is expected to dip. However, climate hazards and geopolitical tensions pose significant risks.

According to a recent report by the United Nations, the Indian economy is anticipated to expand by 6.6% in 2025, driven predominantly by robust private consumption and investment. This optimistic outlook is supported by strong export growth in the services and goods sectors, predominantly pharmaceuticals and electronics, continuing to buoy economic activity in the region.

Additionally, favorable monsoon rains in 2024 have significantly boosted agricultural outputs, setting positive expectations for 2025. The public sector's role in financing large-scale infrastructure projects has been pivotal, further stimulating investment. Consumer price inflation is expected to decelerate, projecting a decrease from 4.8% in 2024 to 4.3% in 2025.

Despite these positive projections, several risks loom. The report highlights potential threats from geopolitical tensions, external demand deceleration, and climate hazards. Notably, South Asia remains vulnerable to weather extremes, which have already impacted food prices and income inequality in the region. Economic growth may also face setbacks from these ongoing challenges.

(With inputs from agencies.)