New Delhi: India’s economy is expected to grow by 6.9 percent in 2024, retaining its spot as the fastest-growing major economy, said a report by a United Nations agency, in a revision of its earlier 6.2 percent growth rate projection for the country.
The UN Department of Economic and Social Affairs, which released the mid-year update to the World Economic Situation and Prospects 2024 report Friday (Indian Standard Time), has also forecast a global growth rate of 2.7 percent in 2024, faster than the 2.4 percent it had estimated in January this year.
“The upward revisions mainly reflect improved prospects in the United States of America and several large developing economies, notably India and Brazil,” the report said.
India’s growth is largely driven by “robust private spending and significant public investment”, said the report, adding that the country is likely to see weak external demand for its exports, albeit with a few exceptions.
“Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly,” the report said.
India’s “robust performance” has helped strengthen South Asia’s economic outlook, said the report, adding that South Asia’s economy is likely to grow by 5.8 percent in 2024.
It added that India, among many other Asia-Pacific countries, is now witnessing a high labour force participation, almost equalling the pre-pandemic levels.
“In India, labour market indicators have also improved amid robust growth and higher labour force participation,” said the report.
On inflation, the report highlighted that despite overall consumer inflation expected to ease, food inflation remains a concern.
“Consumer price inflation in India is projected to decelerate from 5.6 percent in 2023 to 4.5 percent in 2024, staying within the central bank’s 2 to 6 percent medium-term target range,” the report said.
However, it added that despite some moderation, food prices in South Asia remained elevated in the first quarter of 2024, “especially in Bangladesh and India”.
Overall, the report was favourable towards the Indian government’s commitment to “gradually reduce the fiscal deficit, while seeking to increase capital investment”.
Moksha M. Munoth is an intern with ThePrint.
(Edited by Madhurita Goswami)
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