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India’s economy is expected to grow by 6.5% in 2024, according to the United Nations, according to a UN report which notes that multinationals expanding their manufacturing processes in the country to diversify their supply chains will have a positive impact on Indian exports.
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In its report released on Tuesday, the UN Trade and Development said that India grew by 6.7 percent in 2023 and is expected to grow by 6.5 percent in 2024, remaining the largest fastest growing economy in the world.
“The expansion in 2023 was driven by strong public investment spending as well as the vitality of the services sector which benefited from strong local demand for consumer services and firm external demand for exports of services to the country’s businesses,” the report said, adding that these factors are expected to continue to support growth in India in 2024.
The report also notes growing interest among multinationals in India as a manufacturing base as they diversify their supply chains, a reference to China.
“In the outlook, a growing trend of multinationals to expand their manufacturing processes in India to diversify their supply chains will also have a positive impact on Indian exports, while moderation in raw material prices will be beneficial for the export bill. ‘import of the country’, the report states.
Last week, the flagship report ‘Financing for Sustainable Development Report 2024: Development Finance at a Crossroads’ launched at the global body said investments in South Asia, particularly India, remained strong .
He adds that India is benefiting from growing interest from multinationals, who see the country as an alternative manufacturing base in the context of developed economies’ supply chain diversification strategies, apparently referring to China.
The UNCTAD report said the Reserve Bank of India is expected to keep interest rates constant in the short term, while reining in public consumption spending will be offset by strong public investment spending.
In other South Asian countries, however, economic growth remains more moderate. Three countries in the region – Bangladesh, Pakistan and Sri Lanka – are currently subject to IMF programs, the conditionalities of which require the application of strict monetary policies and fiscal austerity measures whose impacts are the most severe felt by low-income households, the report says.
Global growth is expected to be 2.6 percent in 2024, slightly lower than the 2.7 percent in 2023.
This makes 2024 the third consecutive year in which the global economy will grow slower than before the pandemic, while the average rate for 2015-2019 was 3.2%, the report said.
The UNCTAD report adds that risks that threatened to significantly slow global economic growth in 2023 have not fully materialized.
“Some economies – including large economies, such as China, India, Indonesia, the Russian Federation, the United States, among others – have escaped the financial difficulties that loomed earlier in the year,” he said, adding that as a result, the world economy grew by 2.7 percent, just 0.2 percentage points higher than the 2.5 percent threshold often associated with in a phase of global recession.
“This positive dynamic is now squandered. Policy discussions continue to focus on inflation, expressing confidence that anticipated monetary easing will cure the world’s economic woes. At the same time, the pressing challenges of trade disruption, climate change, low growth, underinvestment and inequality are becoming increasingly serious,” the report said.
The report said China’s economy, expected to grow 4.9% in 2024, faces headwinds such as external uncertainties, a challenging real estate market, an underperforming labor market and sluggish consumption. .
The UNCTAD report comes even as the International Monetary Fund said in its latest edition of the World Economic Outlook released on Tuesday that growth in India is expected to remain strong at 6.8 percent in 2024 and 6.5 for cent in 2025, this robustness reflecting continued growth. the strength of domestic demand and the increase in the working age population.
This article was generated from an automated news agency feed without modification to the text.
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News / Business / Indian economy expected to grow 6.5% in 2024, says UNCTAD
