The Indian economy is expected to increase by about 7% this year, according to updated UN growth forecasts for 2024. According to the agency's World Economic Situation and Prospects (WESP) report as of mid-2024, which was made public on Thursday, India's GDP is expected to grow by 6.9% in 2024 and 6.6% in 2025.
India's GDP is expected to grow by 6.9% in 2024 and 6.6% in 2025, mostly due to robust private spending and significant state investment. Pharmaceutical and chemical exports are anticipated to rise significantly, despite the fact that muted external demand will continue to hinder goods export development, according to the research.
The growth rate of 6.2% that the UN had predicted in January has now been increased. The 6.6% prediction for 2025 is still in place.
According to the estimate, consumer price inflation will slow down from 5.6% in 2023 to 4.5% in 2024. This is within the 2–6% medium-target range set by the Reserve Bank of India (RBI). A strong economy and increased labor force participation have also led to improvements in labor market indices. Additionally, the administration is dedicated to raising capital investment and progressively reducing the budget deficit.
The UN estimate was released after Moody's Ratings estimated that the Indian economy will grow by 6.6% in the current fiscal year. This estimate was comparable to Deloitte's, which was also 6.6%, but it was lower than that of the RBI and other agencies.
In contrast, S&P Global Ratings and Morgan Stanley predicted a growth rate of 6.8% for the current fiscal year, while the RBI expected a rise of 7%. Fitch Ratings and the Asian Development Bank (ADB) both projected growth of 7%.
Global Economic Growth
In addition to India's good performance, Pakistan and Sri Lanka showed signs of modest recovery, and South Asia's economic outlook is predicted to stay positive. In addition, an increase of 0.6 percent since January was made to the forecast for the regional GDP growth rate, which was raised to 5.8% in 2024 and 5.7% in 2025.
In the meanwhile, growth of the global economy is expected to reach 2.7 percent in 2025, up 0.1 percentage points from the January estimate, and 2.7 percent in 2027, up 0.3 percentage points.
The most recent estimate, which was revised upward by 0.9 percentage points for the US, predicts growth of 2.3 percent in 2024. Additionally, the growth rate for China was changed from the 4.7% predicted in January to 4.8% in 2024.
Strong domestic and international demand is helping several sizable developing nations, such as Indonesia, India, and Mexico. However, many economies in Africa, Latin America, and the Caribbean are experiencing low growth due to factors like high inflation, high borrowing costs, ongoing pressure on exchange rates, and lingering political unrest.
Although geopolitical tensions in the Middle East are predicted to endure, interruptions in the Red Sea and the rising cost of freight will continue to be obstacles to global trade recovery in 2024.
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