UN Revises India’s Economic Growth Forecast, Projects 6.9% GDP Expansion in 2024

The United Nations has revised its economic growth projections for India, forecasting the country’s GDP to expand by 6.9% in 2024. This is a significant upward adjustment from the 6.2% growth rate predicted in January. The mid-year update of the World Economic Situation and Prospects (WESP) report attributes this improvement to robust public investment and strong private consumption.

Released on Thursday, the report also projects India’s economy to grow by 6.6% in 2025. The sustained growth is expected despite challenges such as subdued external demand, which may impact merchandise export growth. However, the report highlights that exports in sectors like pharmaceuticals and chemicals are likely to see substantial growth.

The January WESP 2024 report had initially projected India’s GDP growth at 6.2% for 2024, driven by strong domestic demand and growth in manufacturing and services. The latest update maintains the 6.6% growth forecast for 2025.

In terms of inflation, the report predicts a decrease in consumer price inflation in India, from 5.6% in 2023 to 4.5% in 2024, which is within the central bank’s medium-term target range of 2-6%. The report also notes that inflation in other South Asian countries is expected to decline further in 2024, with rates ranging from 2.2% in the Maldives to 33.6% in Iran. Despite these improvements, food prices remained high in the first quarter of 2024, particularly in Bangladesh and India.