The United Nations (UN) has revised India’s economic growth forecast for 2024, projecting a robust growth rate of 6.9%, up from the earlier estimate of 6.2%. The updated forecast is part of the UN’s World Economic Situation and Prospects (WESP) report released on Thursday, which also predicts a 6.6% growth rate for India in 2025.

The report attributes India’s anticipated growth to strong public investment and resilient private consumption. Despite subdued external demand affecting merchandise exports, the pharmaceuticals and chemicals sectors are expected to see significant growth, contributing to the overall positive outlook.

Additionally, the report forecasts a decrease in consumer price inflation from 5.6% in 2023 to 4.5% in 2024, aligning with the Reserve Bank of India’s (RBI) target range of 2-6%. This reduction in inflation is likely to support economic stability and growth.

The labour market in India has shown improvement, bolstered by economic growth and higher labour force participation rates. This positive trend reflects the overall health of the economy and its capacity to generate employment.

The UN’s updated projection aligns closely with Moody’s ratings, which have pegged India’s economic growth at 6.6% for the current fiscal year. This estimate is slightly lower than the RBI’s projection of 7% but matches Deloitte’s forecast. Other agencies, including S&P Global Ratings and Morgan Stanley, have projected growth rates of 6.8%, while the Asian Development Bank (ADB) and Fitch Ratings estimate a growth rate of 7%.

In a broader regional context, the report highlights economic developments in South Asia. With India leading the way, the regional GDP is expected to grow by 5.8% in 2024, up from the previous projection of 5.2%, and 5.7% in 2025. This positive outlook is supported by slight recoveries in Pakistan and Sri Lanka.

Globally, the UN report projects the economy to grow by 2.7% in 2024, an increase of 0.3 percentage points from the January forecast. For 2025, global growth is expected to be 2.8%, up by 0.1 percentage points. These projections indicate a cautious but positive outlook for the global economy.

The report also includes specific forecasts for major economies. The US economy is expected to grow by 2.3% in 2024, an upward revision of 0.9 percentage points. China’s growth rate has been revised to 4.8% in 2024, up from the earlier forecast of 4.7%.

Several large developing countries, including Indonesia, India, and Mexico, are benefiting from strong domestic and external demand, contributing to their positive economic outlooks. However, the report notes that many economies in Africa, Latin America, and the Caribbean continue to struggle with low growth due to high inflation, elevated borrowing costs, persistent exchange rate pressures, and political instability.

Overall, the UN’s revised growth projections for India and other major economies reflect a cautiously optimistic outlook for global economic recovery and stability in the coming years.

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