India to become world's fastest-growing economy in 2024: UN

India's economic growth is expected to be the fastest in the world in 2024 amid economic challenges faced by other South Asian nations, a new report by United Nations (UN) said. Predicting the country to grow at 6.7% in 2024, the UN said India continues to be a "bright spot" of the global economy showing significant growth supported by resilient domestic demand, reported PTI.

• This is another encouraging sign for India in the midst of global economic recession fears.
• Following the COVID-19 pandemic, the worldwide economic crisis was prompted by the Russia-Ukraine crisis and rising interest rates in the United States, which increased global gasoline rates and other import prices.
• Countries with high financial obligations, such as India's neighbors Pakistan and Sri Lanka, are evidently the most impacted.

According to the mid-2023 World Economic Situation and Prospects report, released on Tuesday, India's economy, the largest in South Asia, is predicted to grow by 5.8% in 2023 and 6.7% in 2024 (on a calendar year basis), underpinned by solid domestic demand. In India, inflation is predicted to fall to 5.5% in 2023 due to the moderation of commodity prices and slower currency depreciation.

India's economic growth forecasts in the mid-year review stayed unchanged from the January 2023 report. It said India's gross domestic product (GDP) is expected to drop to 5.8% in 2023 as higher interest rates and a global economic recession impact investment and exports. It had also predicted that India would expand at 6.7% in 2024, making it the world's fastest-growing major economy.

Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN Department of Economic and Social Affairs, Hamid Rashid, told PTI that India remained a "bright spot." "Our projection for India hasn't changed since January...we see many positives, including the significant decrease in inflation," he said. He added that further fiscal expansion and monetary accommodation would support domestic demand.

Rashid, among other things, had a word of caution for India. He emphasized that if the external finance situation deteriorates more and gets much tighter, India would have significant issues, as will the country's exports. Notably, the global economy faces the possibility of a lengthy period of poor growth as a result of the lingering impacts of the COVID-19 pandemic and climate change.

According to the report, the global economy will rise by 2.5% (-0.2 percentage points) in 2024, a modest rise from the 2023 forecast. In the United States, growth will reach 1.1% in 2023, while the European Union's GDP is expected to rise by 0.9% this year. China's growth this year is now projected to be 5.3%, up from 4.8% predicted previously.