South Asia is expected to have a robust economic growth projected at 5.7 per cent in 2025 and 6.0 per cent in 2026, driven by strong performance in India as well as economic recovery in a few other economies, despite a volatile geopolitical environment and global trade challenges.
The region, which houses more than one fourth of the world’s population will register far better than the global GDP growth, which is now forecast at just 2.4 per cent in 2025, down from 2.9 per cent in 2024.
UN World Economic Situation and Prospects 2025 says India, whose 2025 growth forecast has been revised downward to 6.3 per cent, remains one of the fastest growing large economies.
Pakistan will record a “moderate growth, stabilizing after a period of economic contraction”, with its Gross Domestic Product (GDP) projected to expand by 2.3 per cent in 2025.
China, which borders both India and Pakistan ’s growth is expected to slow to 4.6 per cent this year, reflecting subdued consumer sentiment, disruptions in export-oriented manufacturing and ongoing property sector challenges.
Taken together, India, China, Pakistan to see substantial economic growth in 2025 amid challenges, the growth prediction indicates.
China, India and Pakistan will record multi-speed growth trajectories in 2025.
UN World Economic Situation and Prospects 2025 says global GDP growth is now forecast at just 2.4 per cent in 2025, down from 2.9 per cent in 2024 and 0.4 percentage points below the January 2025 projection.
The latest prediction on global growth prospects sees the global economy at a precarious juncture, marked by heightened trade tensions and elevated policy uncertainty.
Recently, the U.S. and China have stepped back from imposing high reciprocal trade tariffs, which, according to experts could have cast a shadow on the global growth scenario.
The region housing South Asia and China has a combined population of 2.8 billion, which makes it a consequential part of the world’s 8.2 billion people, both as economic engine and a massive consumer market.
Thee global GDP growth is now forecast at just 2.4 per cent in 2025, down from 2.9 per cent in 2024 and 0.4 percentage points below the January 2025 projection.
The report notes that declining inflation has allowed most of the South Asian region’s central banks to commence or continue monetary easing in 2025.
Meanwhile, governments in Pakistan, Bangladesh and Sri Lanka are expected to continue fiscal consolidation and economic reforms under IMF-supported programs.
While China is the second largest world economy, and India has positioned itself as a hub for world investment and manufacturing, Pakistan is still at an early stage of recovery in the backdrop of inflationary pressures, expensive energy and political instability.
The recent Pakistan-India standoff has seen the trade coming to a standstill, Both countries have closed their airspace to each other. India has also threatened to withhold Pakistan’s share of water.
The latest developments indicate that the two countries might resume bilateral talks that could open up ways toward cooperation.
President Donald Trump, who mediated a ceasefire between the two nuclear-armed South Asian countries, has also pledged to expand trade with both.
Iftikhar Ali is a veteran Pakistani journalist, former president of UN Correspondents Association, and a recipient of the Pride of Performance civil award
