UN raises India’s 2024 growth rate to 6.9%, maintaining status as world’s fastest-growing large economy

While the growth projection for 2024 remains at 6.6%, the revised projection of 6.9% for 2023 paints a promising picture for the Indian economy.

The United Nations (UN) has elevated its growth projection for the Indian economy, solidifying its position as the world’s fastest-growing large economy in 2024. This positive perspective is attributed to a convergence of factors, which include lower inflation, robust exports, and a surge in foreign investment.

One of the key drivers of India’s economic strength is its success in managing inflation. Compared to other countries grappling with rising prices, India has managed to significantly bring down inflation. This achievement helps ease pressure on government finances and creates a more stable economic environment.

Another pillar of India’s economic growth is the solidity of its export sector. The report highlights the “robustness” of Indian exports, indicating a strong global demand for Indian goods and services. This export strength translates into increased foreign currency reserves and fuels further economic activity.

fastest-growing large economy
Source: Prameyanews

The UN report also sheds light on a crucial shift in the global investment landscape. Western companies are increasingly viewing India as an attractive investment destination. This trend, with investment focus moving away from China and towards India, is providing a significant boost to the Indian economy.

Beyond these key factors, India has several other benefits. A unique import agreement with Russia has resulted in lower oil prices, providing a cost advantage while freeing up resources for other sectors of the economy. Furthermore, the United Nations study highlights favourable advancements in India’s job market. Robust economic growth is driving increased labour participation, particularly among women in South Asia, resulting in a more dynamic workforce.

While the growth projection for 2024 remains at 6.6%, the revised projection of 6.9% for 2023 paints a promising picture for the Indian economy. However, the United Nations report also sounds a note of caution. The global economic outlook is expected to slow down due to rising interest rates, debt issues, and geopolitical tensions.

The United Nations report further analyzes the contrasting situations of developed and developing economies. Developing economies, as a whole, are projected to grow at a faster rate (4.1%) compared to developed economies (1.6%). However, growth within developing countries is uneven. Large economies like India are thriving, but many African, Latin American, and Caribbean nations face challenges due to political instability, high borrowing costs, and currency fluctuations.

China’s expected growth rate of 4.8% in 2024 places it as the second-fastest growing big economy. The US economy is predicted to increase at a rate of 2.3%. According to the analysis, the likelihood of a significant economic downturn in the United States has decreased, notwithstanding strong monetary tightening by the Federal Reserve.

Looking forward, the UN report sees instantaneous technological advancement as both an opportunity and a challenge for the global economy. While innovations such as artificial intelligence can increase productivity and information exchange, they can also worsen existing technical imbalances and reshape labour markets in unexpected ways.

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