Mastercard Forecasts India as the Fastest-Growing Major Economy by 2025, Both Regionally and Globally
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New Delhi, Dec 16 (NationPress) Fueled by a strong middle class and continuous investments, India is set to emerge as the fastest-growing major economy in 2025 on both regional and global fronts, according to the annual economic outlook report from the Mastercard Economics Institute (MEI) released on Monday.
The MEI's report for the Asia Pacific region underscored India's position as the fastest-growing major economy, forecasting a GDP growth of 6.6 percent and an expected 6.2 percent increase in consumer spending in 2025.
“Thanks to a resilient middle class and persistent investments, India is expected to remain robust in the face of global economic challenges and will likely be a top contributor to global growth in 2025, driven by various growth factors,” the report stated.
India has also observed remarkable progress in the participation rate of women in the workforce for those aged 25 to 54, which has increased by 12 percentage points since 2019, contrasting with a mere 1 percentage point increase for men in the same age bracket.
The rise of “The SHEconomy” has resulted in women's labor force participation rate in India fully recovering to levels seen in 2019.
MEI anticipates a global GDP growth of 3.2 percent in 2025, following a growth rate of 3.1 percent in 2024. Strong growth is expected to continue in the US, India, and the Gulf Cooperation Council (GCC), while Europe and many regions in Latin America and the Caribbean (LAC) are projected to experience modest expansion.
“If 2024 was characterized by ‘returning to normal’, then 2025 will focus on normalization as volatility decreases and easing monetary policies enable consumers to take advantage of economic growth,” stated David Mann, chief economist for Asia Pacific at Mastercard. “However, policy decisions such as potential interest rate hikes in Japan or tariffs in the US could significantly affect this growth. Businesses should capitalize on consumer optimism while bracing for possible trade disruptions,” Mann added.
The report emphasized the vital importance of remittances for APAC economies, with four of the top five recipient countries located in the region, including India.
Japan is experiencing a distinctive economic situation due to ongoing inflation volatility and the Yen's historic lows, which is fueling the current tourism boom and spending on luxury goods.
Countries like Australia, New Zealand, and Singapore, having faced stronger inflation shocks than others in the region, are expected to experience relief as inflation rates drop to around 2-3 percent and central banks begin to ease their respective monetary policies, as noted in the report.
“The actions taken by individual governments could have significant ripple effects in 2025,” Mann stated.
