UN raises India's 2024 GDP growth forecast to 6.9%
The United Nations (UN) has updated its economic growth projections for India in 2024, predicting a nearly 7% expansion, an increase from the previous forecast of 6.2% made in January. The World Economic Situation and Prospects (WESP) mid-2024 report released on Thursday stated, "India's economy is forecast to expand by 6.9% in 2024 and 6.6% in 2025." This growth is expected to be primarily driven by robust public investment and resilient private consumption.
UN report highlights India's export and inflation outlook
Despite a subdued external demand affecting merchandise export growth, the UN report anticipates significant expansion in pharmaceuticals and chemicals exports. The same report also projects a decrease in consumer price inflation from 5.6% in 2023 to 4.5% in 2024, aligning with the Reserve Bank of India's medium-term target range of 2-6%. Furthermore, it noted improvements in labor market indicators amid robust growth and increased labor force participation.
Other agencies' growth predictions for India's economy
The UN's revised projection follows Moody's Ratings's estimate of a 6.6% growth rate for the Indian economy in the current fiscal year. This matches Deloitte's projection but is lower than other agencies' predictions. The Reserve Bank of India, Asian Development Bank (ADB), and Fitch Ratings all project a growth rate of 7%. Meanwhile, S&P Global Ratings and Morgan Stanley estimate a growth rate of 6.8%.
South Asia's economic outlook bolstered by India
The UN report indicates that the economic outlook for South Asia remains strong, largely due to robust performance from India and slight recoveries in Pakistan and Sri Lanka. The regional GDP is projected to grow by 5.8% in 2024, an upward revision of 0.6% since January, and 5.7% in 2025. This growth is expected to contribute significantly to the world economy, which is projected to expand by 2.7% in 2024 and 2.8% in 2025.
