UN upwardly revises India’s growth to 6.9%

The United Nations has added its bit to the growing bullishness about the Indian economy, revising the country’s growth rate upwards to almost 7 per cent this year. Strong public investment and resilient private consumption would be the main drivers, the UN World Economic Situation and Prospects (WESP) 2024 report said.

Similar estimates about the Indian economy have been made in the recent past by the International Monetary Fund (IMF), World Bank, the Asian Development Bank (ADB), Moody’s Ratings, etc.

WESP said, “India’s economy is forecast to expand by 6.9 per cent in 2024 and 6.6 per cent in 2025, mainly driven by strong public investment and resilient private consumption. Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly.”

In January, the UN had pegged India’s economic growth at 6.2 per cent.

The WESP update estimates consumer price inflation in India to decline from 5.6 per cent in 2023 to 4.5 per cent in 2024, which is within the Reserve Bank of India’s toleration band of 2-6 per cent.

Labor market indicators have also improved amid robust growth and higher labor force participation, the WESP update said, adding that the government remains committed to gradually reducing the fiscal deficit, while seeking to increase capital investment.

South Asia’s economic outlook is expected to remain strong, supported by a robust performance of India’s economy and a slight recovery in Pakistan and Sri Lanka, the update said.

Global trade is expected to recover in 2024.