Indian economy likely to grow at 6.2% in 2024, says UN report
India’s economy has been outperforming its peers for the past few years, a senior United Nations official told reporters.
The Indian economy is projected to grow at 6.2% in 2024 due to robust domestic demand and strong growth in the manufacturing and services sectors, the United Nations’ Department of Economic and Social Affairs said on Thursday.
The projected growth rate is marginally lower than the 6.3% estimate for 2023, said the UN World Economic Situation and Prospects 2024 report, launched on Thursday.
“Economic growth in India is projected to remain strong at 6.2% in 2024, following an estimated expansion of 6.3% in 2023, mainly supported by resilient private consumption and strong public investment,” the report said.
The report said that while the manufacturing and services sectors will continue to support the economy, erratic rainfall patterns may dampen agricultural output. It predicted that the Indian economy may grow by 6.6% in 2025.
“[The] Indian economy again outperformed its peers, not just this year but the last few years,” Chief of the Global Eonomic Division Monitoring Branch, Economic Analysis and Policy Division Hamid Rashid told reporters, according to PTI.
Rashid noted that the inflation in India was relatively high, but said that the country “did not have to raise rates as much and inflation has come down quite a bit”. He said this allowed the Indian government to sustain the fiscal support that it needed.
Asked about factors holding back India’s economic growth, Shantanu Mukherjee, Director of the Economic Analysis and Policy Division, cited GDP growth projections of four years from 2022 to 2025 and said, “I’m not sure that 7.7%, 6.3%, 6.2% and 6.6% is exactly holding something back.”
He added: “In a kind of abstract sense, one would run the risk of overheating an economy if you grew at much faster rates at the size and complexity of India.”
The report cited the Reserve Bank of India to state that India’s labour market indicators improved over the year, with labour force participation increasing in August to its highest rate since the onset of the pandemic.
The unemployment rate averaged 7.1% in September, which was the lowest value in a year, with unemployment in rural areas falling notwithstanding weaker monsoon rains, according to the report.
The United Nations report said that global economic growth is projected to slow from an estimated 2.7% in 2023 to 2.4% in 2024. It estimated that South Asia recorded economic growth of 5.3% in 2023, and may register growth of 5.2% in 2024, driven by “robust expansion” in India.
