Indian economy projected to grow 6.5 per cent in 2024: UNCTAD

Indias economy is projected to grow by 65 per cent in 2024 according to a report by the UN which noted that multinationals extending their manufacturing processes into the country to diversify their supply chains will have a positive impact on Indian exportsUN Trade and Development UNCTAD in its report released on Tuesday said that India grew by 67 per cent in 2023 and is expected to expand by 65 per cent in 2024 continuing to be the fastestgrowing major economy in the worldThe expansion in 2023 was driven by strong public investment outlays as well as the vitality of the services sector which benefited from robust local demand for consumer services and firm external demand for the countrys business services exports the report said adding that these factors are expected to continue to support growth in India in 2024The report also noted the increasing focus by multinationals on India as a manufacturing base as they diversify their supply chains a reference to ChinaIn the outlook an increasing trend of multinationals extending their manufacturing processes into India to diversify their supply chains will also have a positive impact on Indian exports while moderating commodity prices will be beneficial to the countrys import bill it saidLast week the flagship 2024 Financing for Sustainable Development Report Financing for Development at a Crossroads launched at the world body said that investment in South Asia particularly in India remains strongIt added that India is benefiting from growing interest from multinationals which see the country as an alternative manufacturing base in the context of developed economies supply chain diversification strategies making an apparent reference to ChinaThe UNCTAD report said the Reserve Bank of India is expected to keep interest rates constant in the near term while restrained public consumption spending will be offset by strong public investment expendituresIn other Southern Asian countries however economic growth remains more subdued Three countries in the region Bangladesh Pakistan and Sri Lanka are currently under IMF programmes the conditionalities of which necessitate the application of tight monetary policies and fiscal austerity measures whose impacts are most severely felt by lowincome households it saidGlobal growth is projected to be 26 per cent in 2024 slightly slower than the 27 per cent in 2023This makes 2024 the third consecutive year in which the global economy will grow slower than before the pandemic when the average rate for 20152019 was 32 per cent the report saidThe UNCTAD report added that the risks that substantially threatened to slow down global economic growth in 2023 did not fully materialiseSome economies including large ones such as China India Indonesia the Russian Federation the United States among others escaped the financial trouble that loomed earlier in the year it said adding that as a result the world economy grew 27 per cent just 02 percentage point more than the threshold of 25 per cent that is often associated with a global recessionary phaseThis positive dynamic is now being squandered Policy discussions continue to centre on inflation conveying confidence that anticipated monetary easing will heal the worlds economic woes Meanwhile the pressing challenges of trade disruptions climate change low growth underinvestment and inequalities are growing more serious it saidThe report said that Chinas economy projected to grow 49 per cent in 2024 has been facing some headwinds such as external uncertainties a troublesome housing market an underperforming labour market and subdued consumptionThe 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 projected to remain strong at 68 per cent in 2024 and 65 per cent in 2025 with the robustness reflecting continuing strength in domestic demand and a rising workingage populationThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever