According to a UNCTAD report, India’s economy is expected to grow 6.5% in 2024. The report highlights that India experienced a growth of 6.7% in 2023 and is anticipated to remain the fastest-growing major economy in the world. This positive outlook follows India’s notable performance in 2023, where the economy grew by 6.7%, maintaining its position as the fastest-growing major economy globally.
The report emphasizes that India’s growth in 2023 was driven by strong public investment and a vibrant services sector. It predicts continued growth in 2024, citing factors such as robust local demand and firm external demand for the country’s exports.
The UNCTAD report highlighted that the anticipated risks that could have significantly slowed global economic growth in 2023 did not materialize to the extent feared.
“Some economies – including large ones, such as China, India, Indonesia, the Russian Federation, the United States, among others – escaped the financial trouble that loomed earlier in the year,” it said. Consequently, the world economy expanded by 2.7%, just 0.2 percentage points above the 2.5% threshold often associated with a global recessionary phase.
“This positive dynamic is now being squandered. Policy discussions focus on inflation, conveying confidence that anticipated monetary easing will heal the world’s economic woes. Meanwhile, the pressing challenges of trade disruptions, climate change, low growth, under-investment, and inequalities are growing more serious,” it said.
Impact of Multinationals as per UNCTAD
The UNCTAD report notes the increasing focus of multinationals on India as a manufacturing base to diversify their supply chains, particularly in the context of China. Multinationals extending their manufacturing processes into India are expected to have a positive impact on Indian exports. The report suggests that this trend will contribute to India’s economic growth and help moderate commodity prices.
While India’s economic prospects remain bright, the global economic landscape presents a mixed picture. Global growth is projected to reach 2.6% in 2024, a slight deceleration compared to the previous year. Despite some economies successfully navigating financial challenges, overarching issues such as trade disruptions, climate change, and inequalities persist.
The report warns that policy discussions focusing solely on inflation overlook pressing challenges such as trade disruptions and climate change. China’s economy is projected to grow by 4.9% in 2024, but it faces challenges like external uncertainties and subdued consumption.
India’s Growth Projection by International Monetary Fund (IMF)
Complementing the UN’s optimistic forecast, the International Monetary Fund (IMF) expects India’s growth trajectory to remain robust. The IMF’s World Economic Outlook projects India’s economy to expand by 6.8% in 2024 and 6.5% in 2025.
The IMF attributes India’s sustained growth to the country’s strong domestic demand and a burgeoning working-age population. This positive outlook underscores India’s resilience and potential to emerge as a key driver of global economic growth in the coming years.
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