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UN raises India's growth rate in 2024 to nearly 7 pc, remains world's fastest-growing large economy

According to the latest update, the consumer price inflation in India is projected to decelerate from 5.6 per cent in 2023 to 4.5 per cent in 2024, staying within the central bank’s two to six per cent medium-term target range.

Edited By: Ashesh Mallick @asheshmallick07 United Nations Published on: May 17, 2024 8:30 IST
Indian economy growth projection, India fastest growing economy, UN India economy growth, Business
Image Source : PIXABAY Representative Image

Business news: The United Nations has revised India’s upwards growth projections for 2024 and predicted that the country’s economy will now expand by nearly seven per cent this year, “mainly driven by strong public investment and resilient private consumption”. The data was out on Thursday (May 16) in the World Economic Situation and Prospects as of mid-2024.

“India’s economy is forecast to expand by 6.9 per cent in 2024 and 6.6 per cent in 2025, mainly driven by strong public investment and resilient private consumption. Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly,” it said.

The UN had made a forecast of 6.2 per cent GDP growth for India in January this year, and the latest 6.9 per cent economic growth projections for the country in a mid-year update shows the upward revision.

The UN World Economic Situation and Prospects (WESP) 2024 report that was launched in January had said that growth in India was projected to reach 6.2 per cent in 2024, amid robust domestic demand and strong growth in the manufacturing and services sectors.

Projection for India’s growth in 2025

The projection in January for India’s GDP growth for 2025 remains unchanged at 6.6 per cent in the latest assessment of the economic situation.

The update said that consumer price inflation in India is projected to decelerate from 5.6 per cent in 2023 to 4.5 per cent in 2024, staying within the central bank’s two to six per cent medium-term target range.

Similarly, inflation rates in other South Asian countries declined in 2023 and are expected to decelerate further in 2024, ranging from 2.2 per cent in the Maldives to 33.6 per cent in Iran. Despite some moderation, food prices remained elevated in the first quarter of 2024, especially in Bangladesh and India.

In India, labour market indicators have also improved amid robust growth and higher labour force participation, it said. India’s government remains committed to gradually reduce the fiscal deficit, while seeking to increase capital investment.

South Asian economy

South Asia’s economic outlook is expected to remain strong, supported by a robust performance of India’s economy and a slight recovery in Pakistan and Sri Lanka. Regional GDP is projected to grow by 5.8 per cent in 2024 (an upward revision of 0.6 percentage points since January) and 5.7 per cent in 2025, below the 6.2 per cent recorded in 2023.

However, still tight financial conditions and fiscal and external imbalances will continue to weigh on South Asia’s growth performance. In addition, potential increases in energy prices amid geopolitical tensions and the ongoing disruption in the Red Sea pose a risk to the regional economic outlook, it said.

The world economy is now forecast to grow by 2.7 per cent in 2024 (an increase of 0.3 percentage points from the forecast in January) and 2.8 per cent in 2025 (an increase of 0.1 percentage points). The upward revisions mainly reflect a better outlook in the United States, where the latest forecast points to 2.3 per cent growth in 2024 (an upward revision of 0.9 percentage points since January), and several large emerging economies, notably Brazil, India and Russia.

Global trade expected to recover in 2024

Global trade is expected to recover in 2024. The early boost to trade flows in the first months of the year can be attributed to destocking of the inventory that piled up amid supply-chain disruptions in 2021-22.

“China’s foreign trade grew faster than expected in the first two months in 2024, driven largely by exports to emerging markets, particularly to Brazil, India and Russia,” it said.

(With PTI inputs)

ALSO READ | India sets new export record, registers at USD 778 billion in 2023-24: Report

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