UN Revises India's Growth Projections and Global Economic Outlook: Key Points
The United Nations (UN) has revised India's growth projection for 2024, expecting the economy to grow by 6.9%, up from the earlier forecast of 6.2% in January.
The growth projection for 2025 remains unchanged at 6.6%.
The UN's World Economic Situation and Prospects (WESP) report attributes India's growth to strong public investment and resilient private consumption.
Pharmaceuticals and chemicals exports are expected to expand robustly despite subdued external demand impacting merchandise exports.
Consumer price inflation in India is expected to decrease from 5.6% in 2023 to 4.5% in 2024, aligning with the Reserve Bank of India's (RBI) target range of 2-6%.
The labor market has shown improvement, supported by economic growth and higher labor force participation.
Moody’s ratings project India’s economic growth at 6.6% for the current fiscal year, which matches Deloitte’s projection but is lower than the RBI's 7% estimate.
S&P Global Ratings and Morgan Stanley project a growth rate of 6.8%, while the Asian Development Bank (ADB) and Fitch Ratings estimate a 7% growth rate.
South Asia's economic outlook is positive, with slight recovery in Pakistan and Sri Lanka alongside India’s strong performance.
The regional GDP growth is expected to be 5.8% in 2024 (up from 5.2%) and 5.7% in 2025.
The global economy is projected to grow by 2.7% in 2024, an increase of 0.3 percentage points from the January forecast.
For 2025, global growth is expected to be 2.8%, a slight increase of 0.1 percentage points.
The US economy's growth projection for 2024 has been revised upward to 2.3%, an increase of 0.9 percentage points.
China’s growth rate for 2024 has been revised to 4.8%, up from 4.7% in January.
Several large developing countries, including Indonesia, India, and Mexico, are benefiting from strong domestic and external demand.
However, economies in Africa, Latin America, and the Caribbean face low growth due to high inflation, elevated borrowing costs, exchange rate pressures, and political instability.
Global trade is expected to recover in 2024, but challenges persist due to geopolitical tensions in the Middle East, disruptions in the Red Sea, and escalating freight costs.
Conclusion:
The UN's revised projections reflect a positive outlook for India's economy, driven by strong investment and consumption.
The global economy is also expected to see moderate growth despite various regional and geopolitical challenges.