The United Nations has revised its growth projection for India from 6.2% which it projected in January, to 6.9% in 2024. In its World Economic Situation and Prospects report as of mid-2024, the agency projected that India’s economy would grow by 6.9 percent in 2024 and 6.6 percent in 2025. According to the report, strong public investment and resilient private consumption are the main drivers of the growth.
According to the report, the consumer price inflation would slow down from 5.6% in 2023 to 4.5% in 2024. This falls within the 2–6% medium-target range set by the Reserve Bank of India (RBI). It states that although the external demand will continue to weigh the merchandise exports. Yet, the export of Pharmaceuticals and chemicals will continue to grow strongly.
The reports states that other South Asian countries are also expected to experience a decline in inflation rates. The range being 2.2% in Maldives to 33% in Iran.
It stated that in India the labour market indices improved on account of robust growth and increased labor force participation. It noted that the Indian government remains dedicated in bringing down the fiscal deficit, while working to boost capital investment. The report adds that the economy of South Asia is expected to continue to grow on account of robust economic performance of Indian economy and a minor recovery in Pakistan and Sri Lanka.
Recently, Moody’s Ratings projected India’s growth at 6.6% for the current fiscal year. It stated, “We expect India’s economy to expand 6.6 per cent in the year ended March 2025 (FY25) and 6.2 per cent the following year.” According to Moody, strong credit demand along with robust economic growth will support NBFC’s profitability.
Earlier, The S&P Global Ratings and Morgan Stanley predicted a growth rate of 6.8% for the current fiscal year. While the RBI projected a growth rate of 7%. Fitch Ratings and the Asian Development Bank (ADB) both projected growth at 7%.
Meanwhile, the UN’s projects the world economy to grow by 2.7% in the current year and 2.8% in 2025. It expects China to grow at 4.8% up from 4.7% projected in January.
Overall, according to Mr. Rashid of the UN Department of Economic and Social Affairs, “India remains a bright spot.” Furthermore, the global trade to expected to recover. However, prolonged geopolitical tensions in the Middle East, disruptions in the Red Sea, and rising freight costs continue to pose obstacles.