India will remain the fastest growing economy in 2024: UN report

Utkarsh Classes Last Updated 08-01-2024

India will remain the fastest growing economy in 2024: UN report

Report 5 min read

The United Nations released its annual report, ' World Economic Situation and Prospects (WESP) 2024’ on 5 January 2024. WESP said India's economic growth rate will be 6.2% in 2024. This growth rate is highest in South Asia.

Highlights of WESP 2024:

The Indian economy will remain the fastest-growing country in 2024, with a growth rate of 6.2 percent. India's GDP is expected to grow by 6.6 percent in 2025.
The estimated growth rate of the Indian economy in 2023 was 6.3 percent.
The Indian economy will help increase the overall growth rate of Asia and the world.
GDP in South Asia is estimated to grow by 5.2%.

India's GDP growth projections for 2022-2025 (UN):

2022 – 7.7%
2023 – 6.3%
2024 – 6.2%
2025 – 6.6%

Indian economy's growth forecast in 2024:

Organisations Growth Estimates

United Nations – 6.2%
World Bank – 6.3%
IMF – 6.3%
RBI – 6.5%

Global economic growth in UN report:

According to the United Nations report, global economic growth is estimated at 2.7% in 2023. It is estimated to be 2.4 percent in 2024. This was also below the three percent growth rate before the Covid pandemic.

Main reasons for the rapid growth of the Indian economy:

The main reasons behind India's fast economic growth rate are domestic demand and the good performance of the service sector.
One of the reasons for the boom in the Indian economy is investors' attraction to India due to the fear of the worsening economic situation in China.
It has been believed in WESP that the measures the government and RBI are taking to control inflation are showing results.

Possibility of an increase in inflation rate:

The average inflation rate for the year 2023 is estimated to decline from 5.7 percent to 4.5 percent. The inflation rate will remain between the level decided by RBI (two to six percent). But for global reasons, it is likely to increase.
According to the United Nations report, India has also performed better than other countries in removing unemployment.

Unemployment rate was 7.1% in September 2023:

In August 2023, there was the highest participation of people in India's labour market after the Corona epidemic, which shows that more people are getting employment.
The unemployment rate in September 2023 was 7.1 percent, which is the lowest level in the last year. The report even says that despite the poor monsoon, the unemployment rate in rural areas is decreasing.
There has been little improvement in the unemployment situation in other countries of Asia. In fact, the situation has worsened in many countries.

United Nations sceptical about China's economic progress:

According to the report, the United Nations must be more confident about China's economic progress. Especially the way property prices have increased there. Due to this, there is talk of deterioration in the investment environment there.
India has been successful in attracting foreign investors in the year 2023 and the year 2024 will also be similar.

The increasing interest of foreign investors in India:

In India, the government has increased capital expenditure by 43%, which has helped create an investment environment.
According to the report, multinational companies are taking more interest in India. India is central to these companies' strategies to expand their manufacturing base.
The FDI in India in the year 2022 was worth 49 billion dollars. It was 10% more than the year 2021.