Why in NEWS
India’s GDP growth forecast for 2025 has been revised downward from 6.6% to 6.3%, as per the mid-2025 update of the World Economic Situation and Prospects (WESP) report released by the UN Department of Economic and Social Affairs (UNDESA) in collaboration with UNCTAD and regional commissions.
Key Concepts Simplified
| Term/Concept | Meaning |
|---|---|
| WESP Report | A UN flagship report on global and regional economic trends. |
| UNDESA | UN body supporting nations in achieving SDGs via policy data and advice. |
| GDP Growth Forecast | Prediction of how much a country’s economy is expected to grow. |
| Inflation | Rise in general price level, reducing purchasing power. |
| Monetary Policy | Central bank strategies (like interest rates) to control money supply. |
| Manufacturing GVA | Economic output from manufacturing after subtracting intermediate costs. |
| Food Insecurity | Limited or uncertain access to adequate food. |
News Details in Simple Terms
- India remains the fastest-growing major economy despite the cut in GDP forecast to 6.3% for 2025 (down from 7.1% in 2024).
- Growth may pick up slightly to 6.4% in 2026.
- Inflation expected to ease from 4.9% (2024) to 4.3% (2025), staying within RBI’s comfort range.
- Unemployment stable, but female workforce participation remains low.
- Export performance strong:
- Total exports (2024–25): USD 824.9 billion
- Services exports: USD 387.5 billion
- Non-petroleum merchandise: USD 374.1 billion
- Defence exports tripled; India exports to ~100 countries.
Global Outlook at a Glance
| Region/Economy | 2025 Growth Outlook | Key Issues |
|---|---|---|
| Global Average | 2.4% | Slowdown due to policy tightening, supply issues |
| US | ↓ | Tariff hikes, political uncertainty |
| China | 4.6% | Real estate stress, weak demand |
| LDCs | 4.1% | Export drops, debt risks, lower aid |
| Brazil, Mexico, SA | ↓ | Weak trade, falling investments, commodity volatility |
Major Global Issues
| Issue | Impact |
|---|---|
| Food Inflation | Rising costs, worsened by climate shocks and weak currencies. |
| Acute Food Insecurity | 343 million people affected globally, 1.9 million near famine. |
| Tariff Shock | US trade policy raises global costs, hits developing nations hardest. |
About UNDESA
| Feature | Description |
|---|---|
| Founded | 1948 |
| Core Role | Leads UN development agenda, supports SDG implementation |
| Reports To | UN Secretary-General |
| Major Functions | Data, analysis, and global policy guidance |
| Associated UN Bodies | ECOSOC, UN General Assembly, HLPF |
Key Economic Reports & Publishers
| Organization | Reports Published |
|---|---|
| World Bank | Global Economic Prospects, World Development Report |
| IMF | World Economic Outlook, Global Financial Stability |
| WEF | Global Competitiveness, Global Risks Report |
| UNCTAD | World Investment Report |
In a Nutshell (Memory Code: “WESP-FIT”)
- W: WESP report → India still fastest-growing major economy
- E: Exports strong (USD 824.9B)
- S: Structural gender gap in workforce
- P: Price rise easing, inflation within RBI range
- F: Food insecurity, 343M at risk globally
- I: International trade tensions rising
- T: Tariffs disrupt developing economies most
Prelims Practice Questions
- Which of the following organizations releases the World Economic Situation and Prospects (WESP) report?
A. IMF
B. UNDESA
C. World Bank
D. WEF - Which of the following correctly reflects India’s GDP growth forecast for 2025 as per the latest WESP update?
A. 7.1%
B. 6.6%
C. 6.3%
D. 5.8% - Which of the following is not among the contributors to food inflation globally?
A. Currency appreciation
B. Climate shocks
C. Trade protectionism
D. Supply chain disruptions
Mains Practice Questions
- Discuss the implications of a revised GDP forecast on India’s economic planning and welfare programs. (10 marks)
- How do global trade disruptions and rising food insecurity challenge the development agenda in developing countries? Illustrate with recent examples. (15 marks)
Answers – Prelims
| Qn | Answer | Explanation |
|---|---|---|
| 1 | B | WESP is released by UNDESA, not IMF or WB. |
| 2 | C | Latest WESP revision is 6.3% for India’s GDP in 2025. |
| 3 | A | Currency depreciation, not appreciation, contributes to food inflation. |
