The United Nations (UN) has revised its growth projections for India's economy in 2024, expecting it to grow by nearly 7% this year. The UN's World Economic Situation and Prospects (WESP) report, released on Thursday, forecasts India's economy to expand by 6.9% in 2024, up from the earlier projection of 6.2% made in January. The report also maintains a growth rate of 6.6% for 2025, unchanged from the previous forecast.
The projected growth is attributed to strong public investment and resilient private consumption in India. Despite subdued external demand weighing on merchandise export growth, exports of pharmaceuticals and chemicals are expected to expand significantly.
In addition to the growth forecast, the UN report anticipates a slowdown in consumer price inflation in India, from 5.6% in 2023 to 4.5% in 2024, aligning with the Reserve Bank of India's target range of 2-6%. The labor market in India is also showing signs of improvement, supported by economic growth and higher labor force participation.
The UN's updated projection aligns with Moody's ratings, which estimate India's economic growth at 6.6% for the current fiscal year. This estimate matches Deloitte's projection as well.
Globally, the UN report forecasts economic growth of 2.7% in 2024, up from the previous projection, with several large developing countries benefiting from strong domestic and external demand. However, many economies in Africa, Latin America, and the Caribbean are experiencing low growth due to various challenges.
Overall, while global trade is expected to recover in 2024, challenges remain due to persistent geopolitical tensions and disruptions in transportation and logistics.
