New Delhi, April 17 (NationPress) India is projected to continue being the fastest growing major economy, achieving a growth rate of 6.5 percent in 2025. This comes at a time when global growth trends indicate a shift towards a recessionary phase, with the international trading landscape enduring its most significant challenges since the Second World War, as outlined in the most recent UNCTAD report.

According to the report titled 'Trade and Development Foresights 2025 - Under pressure: Uncertainty reshapes global economic prospects', India is among the nations driving economic expansion through increased government spending and monetary policy support.

The report forecasts a 4.4 percent growth rate for China, while the US economy is anticipated to grow by just 1 percent. The European Union is also projected to see a growth rate of 1 percent, although countries like France, Germany, and Italy are expected to experience growth below 1 percent. Japan's economic growth is predicted to drop to a mere 0.5 percent.

As stated in the UNCTAD report, "The global trading system is encountering its most serious challenge since the Second World War. Changes in the structure of international trade and the reconfiguration of global value chains have been evolving over the past decade. The effects of current policy shocks and global uncertainty are expected to accelerate these changes, complicating any forecasts regarding the ultimate impact of trade reconfiguration. Nonetheless, it is evident that merchandise trade flows are under significant pressure and will be profoundly influenced."

The report further indicates that the uptick in global trade observed in late 2024 and early 2025 was partially fueled by front-loaded orders. However, this momentum is projected to diminish, or potentially reverse, throughout 2025 as new tariffs come into play. Trade policy uncertainty is currently impacting businesses and long-term strategic decisions.

In light of rising trade tensions, developing nations are encouraged to capitalize on existing trade relationships and explore multilateral frameworks and regional agreements to enhance both intraregional and South–South trade. The report advocates for a strategy of "open regionalism" as a viable alternative to the global impasse, offering a route towards achieving development goals.

By strengthening current trade connections, particularly within the global South, nations can create a buffer against increasing uncertainties. However, many low-income countries are grappling with a convergence of challenges, including deteriorating external conditions, substantial debt burdens, and declining domestic growth. If the geoeconomic confrontations persist and disrupt the global economy, poorer nations may face a perfect storm, the report warns.

For China, growth is projected to be bolstered by an escalation of fiscal and monetary stimulus measures alongside structural policies. A series of initiatives aimed at stabilizing the real estate sector appear to have yielded positive results, as the downward trend in that sector has been alleviated since the conclusion of 2024. Nonetheless, the increasingly challenging external environment is likely to weigh on growth, according to the report.