India’s Economy Set to Soar: UN Report Forecasts 6.5% Growth in 2024

According to the United Nations Trade and Development report released on Tuesday, India’s economy is poised to grow by 6.5 percent in 2024.

The report underscores the positive impact of multinational corporations expanding their manufacturing operations into India to diversify their supply chains, particularly in boosting Indian exports. India’s growth trajectory remains robust, having expanded by 6.7 percent in 2023, fueled by strong public investment and a vibrant services sector.

The report highlights the increasing focus of multinationals on India as a manufacturing hub, echoing similar strategies undertaken in China. It anticipates a continued trend of multinational companies shifting manufacturing processes to India, which will further enhance export prospects.
Additionally, moderating commodity prices are expected to benefit India’s import bill.

In a separate report, the ‘2024 Financing for Sustainable Development Report’ emphasized the strength of investment in South Asia, with India emerging as a key beneficiary of growing interest from multinationals seeking alternative manufacturing bases.

While India’s economic outlook remains positive, the report notes subdued growth in other Southern Asian countries like Bangladesh, Pakistan, and Sri Lanka, which are under IMF programs requiring tight monetary policies and fiscal austerity measures.

Global growth is projected to be 2.6 percent in 2024, slightly slower than the previous year, marking the third consecutive year of deceleration since the pre-pandemic average rate of 3.2 percent from 2015-2019.

Despite economic headwinds, some economies including China and India managed to escape anticipated financial troubles in 2023. However, the report warns against complacency, stressing the need to address pressing challenges such as trade disruptions, climate change, low growth, under-investment, and inequalities.

China’s economy is projected to grow by 4.9 percent in 2024, despite facing external uncertainties, a challenging housing market, an underperforming labor market, and subdued consumption.

In its latest edition of the World Economic Outlook, the International Monetary Fund reaffirmed India’s strong growth prospects, projecting growth rates of 6.8 percent in 2024 and 6.5 percent in 2025, driven by robust domestic demand and a growing working-age population.

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