According to the ‘World Economic Situation and Prospects (WESP) 2024 – Mid-Year Update’ by the United Nations Department of Economic and Social Affairs (UN-DESA), India’s economy is poised for robust growth. The report has revised India’s GDP growth for 2024 upward to 6.9% from an earlier projection of 6.2% made in January 2024. The forecast for 2025 remains steady at 6.6%.
Key Drivers of Growth
- Public and Private Investment: The anticipated growth is largely fueled by strong public investment and resilient private consumption.
- Exports and Inflation: Despite a subdued external demand affecting merchandise exports, India’s consumer price inflation is expected to decelerate from 5.6% in 2023 to 4.5% in 2024, aligning with the Reserve Bank of India’s medium-term target range of 2% to 6%.
Regional and Global Economic Trends
- South Asia’s Performance: The economic outlook for South Asia is optimistic, supported by India’s strong economic performance and a slight recovery observed in Pakistan and Sri Lanka. The region’s GDP growth is projected to rise to 5.8% in 2024 and slightly reduce to 5.7% in 2025. Consumer price inflation across South Asia is also expected to decrease, influenced by easing currency depreciation and a moderation in agricultural commodity prices due to a weakening El Niño.
- Global Economic Forecast: The global economy is projected to grow by 2.7% in 2024, an increase of 0.3 percentage points from the previous forecast, and continue to grow by 2.8% in 2025. Improved economic prospects in the United States, India, and Brazil contribute to this positive adjustment. However, regions like Africa, Latin America, and the Caribbean face ongoing challenges including low growth, high inflation, and political instability.
- Trade and Tourism: Global trade is anticipated to recover in 2024 despite geopolitical tensions and logistical challenges. Small Island Developing States (SIDS) are expected to see GDP growth improve from 2.4% in 2023 to 3.3% in 2024, supported by a rebound in tourism.
This comprehensive report by UN-DESA underscores a cautiously optimistic global economic environment, with India playing a pivotal role in driving regional and potentially global growth amid prevailing economic uncertainties.
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