India to grow at 6.2% in 2024 supported by manufacturing, services sectors: UN

In 2024, India is projected to grow at 6.2% supported by robust domestic demand and strong growth in the manufacturing and services sectors, the United Nations said.

The UN World Economic Situation and Prospects (WESP) 2024 report further said the gross domestic product (GDP) in South Asia is projected to increase by 5.2% in 2024, driven by a robust expansion in India, which remains the fastest-growing large economy in the world.

Growth in India is projected to reach 6.2% in 2024, slightly lower than the 6.3% estimate for 2023, amid robust domestic demand and strong growth in the manufacturing and services sectors, the report said.

While speaking with the media, the Chief of the Global Economic Division Monitoring Branch, Economic Analysis and Policy Division (UN DESA), Hamid Rashid said the Indian economy again outperformed its peers, not just this year but the last few years.

India’s economic growth has consistently remained over six per cent and we believe this will continue in 2024 and 2025 as well, he noted.

He further added that although inflation was relatively high for India, it didn’t have to raise rates as much and inflation has come down quite a bit.

The report said the growth in India is projected to reach 6.2% in 2024, slightly lower than the 6.3% estimate for 2023, amid robust domestic demand and strong growth in the manufacturing and services sectors. India’s GDP is projected to increase to 6.6% in 2025.

The report notes that economic growth in India is projected to remain strong at 6.2% this year mainly supported by resilient private consumption and strong public investment.

It highlighted that while the manufacturing and services sectors will continue to support the economy, erratic rainfall patterns will likely dampen agricultural output.

Director of the Economic Analysis and Policy Division Shantanu Mukherjee cited India’s GDP growth rates of four years from 2022-2025 and said: “I’m not sure that 7.7%, 6.3%, 6.2% and 6.6% is exactly holding something back.”

The report noted that the consumer price inflation in India is expected to decelerate from 5.7% in 2023 to 4.5% in 2024, staying within the two to six per cent medium-term inflation target range set by the Central Bank.

The risk of a surge in inflation in the coming months cannot be ruled out, however, as potential increases in commodity prices and the adverse impact of climate events on food prices could disrupt the pace of disinflation.

The UN said global economic growth is projected to slow from an estimated 2.7% in 2023 to 2.4% in 2024, trending below the pre-pandemic growth rate of 3%.

This latest forecast comes on the heels of global economic performance exceeding expectations in 2023. However, last year’s stronger-than-expected GDP growth masked short-term risks and structural vulnerabilities.

Mitali Gautam

The Statesman

Asia News Network