UN upgrades India's expected economic growth rate to 6.9% for 2024

The United Nations has revised its growth rate forecast for the Indian economy in 2024(Janauary- December) to 6.9 per cent. The latest forecast regarding the India economy was made in the World Economic Situation and Prospects as of mid-2024 report  released on 16 May 2024.The  World Economic Situation and Prospects  report is released by the United Nations Economic Analysis and Policy Division. 

In its January 2024  report, it had forecasted an economic growth rate of 6.2 percent for India in 2024.The main reason cited by the report for an improvement in Indian economy has been the strong public investment and resilient private consumption.

Public investment refers to the investment made by the government or government-owned companies for creating long term assets (e.g power plants, roads, air ports, ports, etc). 

Private consumption refers to the money spent by households (non-government) in buying goods and services for consumptions (like cars ,fridges, soap, butter ,biscuits etc)

Main Highlights of the UN Report 

The  January report of the  UN World Economic Situation and Prospects (WESP) 2024 had predicted a growth rate of 6.2 percent which has now been revised to 6.9%.

However there has been no change in the economic growth rate forecasted  for 2025 which has been retained at 6.6 percent.

The report inflation to decline in India from 5.6 percent in 2023 to 4.5 percent in 2024. RBI’s medium term inflation target is two to six percent.

Due to strong economic growth the labour market is expected to remain strong in India .

It expects the Indian pharmaceuticals and chemical export to grow strongly though the merchandise export will face problem due to continuing tension in West Asia and Red Sea.

Global economy to grow by 2.7 per cent in 2024

• According to the UN World Economic Situation and Prospects report the global economy is expected to grow by 2.7 per cent in 2024 and 2.8 per cent in 2025 .
• World’s largest economy, the United States is expected to grow by 2.3 percent in 2024 
• World’s second largest economy ,China is expected to grow  by 4.8 per cent in 2024.
• The South Asia region as a whole is expected to grow by 5.8 percent in 2024 mainly due to strong performance of the Indian economy and aided by  a slight recovery in  the Sri Lankan and Pakistani economy .
• In 2025, it expects the South Asian economy as a whole to grow by 5.7 percent in 2025.

Expected Growth rate of the Indian economy in 2023-24/2024-25

Following are the forecasts of various global and Indian financial agencies (as of 18 May  2024)