Indian Economy: The Indian economy is expected to grow at 6.7 per cent in calendar year 2024 on strong domestic demand. This has been estimated in a report of the United Nations.
However, the report added that high interest rates and weak external demand will affect the country’s investment and exports this year.
The UN report titled ‘Global Economic Status and Prospects to Mid-2023’ was released here on Tuesday.
The report says that India, which is the largest economy in the South Asian region, will register an economic growth of 5.8 per cent in 2023 and 6.7 per cent in 2024 (calendar year basis).
The Indian economy will be supported by strong domestic demand. However, higher interest rates and weak external demand will continue to put pressure on the country’s investment and exports in 2023.
It has been said in the report that in 2023 the inflation rate in India will come down to 5.5 percent. A softening of global commodity prices and a slowing of currency depreciation should moderate ‘imported’ inflation.
The estimate of India’s economic growth has not been changed in this assessment. This is in line with the projections made in the World Economic Situation and Prospects-2023 report released in January this year.
The flagship report released in January said that India’s gross domestic product (GDP) growth rate is expected to decline to 5.8 per cent in 2023. This is because higher interest rates and a slowdown in the global economy will affect the country’s investments and exports.
The report says that India’s economic growth will remain ‘robust’. However, the outlook for other South Asian countries is ‘more challenging’. The flagship report states that India’s economy is projected to grow at 6.7 per cent in 2024.
India will be among the fastest growing major economies of the world
India will be among the fastest growing major economies of the world. Hamid Rashid, head of the Economic Analysis and Policy Division, the global economic monitoring unit of the United Nations Department of Economic and Social Affairs, told a press conference that India is a “bright spot” in the world economy.
Responding to a PTI-language question on the Indian economy, Rashid said India remains a strong destination. Our projections for India have not changed since January and we see many positives. Inflation is also included in these which has come down considerably. India’s inflation is around 5.5 percent while the regional average for South Asia is 11 percent.
This means that there is ample room for fiscal expansion and monetary policy to support domestic demand, he said. However, at the same time he said that external risks remain. Rashid said, “If the external finance situation worsens, then India may have to face some challenges.”
According to the report, the global economy is now projected to grow at 2.3 percent in 2023 (0.4 percentage points higher than the January forecast) and 2.5 percent in 2024 (0.2 percentage points lower). Regarding the US, the report said that the growth rate of its economy in 2023 has been increased to 1.1 percent due to better spending of households.
At the same time, the European economy is estimated to grow at a rate of 0.9 percent. China’s growth forecast for this year has been raised to 5.3 per cent from 4.8 per cent.