The World Economic Situation and Prospects

The World Economic Situation and Prospects : Recently, the UN released a report titled The World Economic Situation and Prospects as of mid-2025.

• Key Highlights: Global GDP growth for 2025 is revised down to 2.4% from 2.9% in 2024 and 2.8% projected earlier.

o Least-developed countries’ growth forecast cut to 4.1% from 4.5% in 2024.

o Fiscal space shrinking due to lower export revenues, tighter financial conditions, and reduced development aid.

o Increasing debt stress, especially in countries near or in default.

o Food insecurity expected to worsen in fragile states like South Sudan, Mali, Haiti, and Gaza.

o Inflation from 2020 to 2024: 35% rise in developing economies versus 20% in developed ones.

o Poor households most affected due to higher prices of essentials such as food, fuel, and medicine.

• India-Specific Findings : GDP growth for 2025 is revised to 6.3%, down from 7.1% in 2024 and 6.6% projected earlier.

o Strengths include strong private consumption, public investment, and services exports.

o Inflation is expected to ease to 4.3%, within the RBI’s target.