Current Affairs - Economy

The UN’s World Economic Situation and Prospects (WESP) mid-year report projects India’s GDP growth rate at 6.3% for the year 2025 and increases slightly to 6.4% in 2026. This solid forecast underscores India’s position as the fastest-growing large economy globally. The projection is supported by robust private consumption and sustained public investment, which continue to fuel economic expansion despite global headwinds. In contrast, the global economic growth rate is anticipated to be significantly lower, at 2.4%, due to persistent trade tensions and uncertainty in policy environments. These figures highlight India’s relative economic resilience and positive outlook in the international context.

In April 2025, India's unemployment rate stood at 5.1% according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). This figure represents the proportion of the labour force that was actively seeking work but remained unemployed. The data also included figures for the Labour Force Participation Rate (LFPR), which was 55.6% overall, with 58% in rural areas and 50.7% in urban regions. These statistics are part of the government’s first monthly labour force and unemployment data collection, offering a more granular view of the country’s employment landscape.

India, despite having one of the largest cooperative movements globally, with over 8.5 lakh cooperatives, still reflects significant gender disparity in cooperative participation. As per the 2023 NITI Aayog report, only 2.52% of these cooperatives are women-only, highlighting the underrepresentation of women in formal cooperative structures. This figure underscores the need for greater gender inclusion in cooperative governance and support systems. Cooperative societies, by their nature, are intended to be inclusive and community-driven, but historical, structural, and cultural barriers have limited women's active participation. Enhancing women’s role in cooperatives could contribute significantly to social equity and grassroots economic empowerment.

On May 9, 2025, Morningstar DBRS upgraded India’s sovereign credit rating from ‘BBB (low)’ to ‘BBB’, reflecting a stable outlook. This upgrade highlights India’s progress in key economic areas such as fiscal consolidation, structural reforms, and macroeconomic stability. The agency cited consistent GDP growth, a declining debt-to-GDP ratio, low inflation, stable exchange rates, and improvements in the banking sector, including high capital adequacy and low non-performing assets, as core drivers for the revision. The enhanced rating indicates stronger global confidence in India’s economic trajectory and positions the country more favourably in international investment circles.

Moody’s Ratings, in its May 2025 update to the Global Macro Outlook, has revised India’s GDP growth forecast for the calendar year 2025 downward to 6.3%. The downgrade from the earlier estimate of 6.5% is attributed to rising global trade and policy uncertainty, particularly from evolving U.S. trade strategies, and heightened geopolitical tensions across multiple regions, including the India-Pakistan border and the South China Sea. Additionally, financial market volatility and tight global liquidity conditions have added to the economic risks. Despite this, Moody’s maintained India’s 2026 growth forecast at 6.5%, expecting conditions to stabilise over time.