According to the United Nations World Economic Situation and Prospects (WESP) report, India has emerged as a top performer in the global economy, projecting a growth rate of 6.2 per cent for the current year, significantly outpacing the expected global economic expansion of 2.4 per cent. Hamid Rashid, the chief of the Global Economic Monitoring Branch, highlighted India's consistent growth momentum, with GDP growth estimated at 6.3 per cent in 2023 and expected to sustain at 6.2 per cent in 2024, subsequently rising to 6.6 per cent next year.
The report attributes India's growth trajectory to robust private consumption and substantial public investments, anticipating strong support from these factors. Shantanu Mukherjee, the Director of the UN Economic Analysis and Policy Division, suggested that India's economy is operating at an optimal pace without signs of overheating, despite the consistent growth rates observed.
Contrary to India's upward trajectory, the global economic growth is anticipated to slow down, with the US, European Union, China, and South Asia region experiencing varied growth projections. While the report forecasts a moderation in the US growth rate to 1.3 per cent and an increase in the EU growth rate to 1.2 per cent this year, China's growth is expected to decline to 4.7 per cent.
Regarding South Asia, which includes Iran, the growth rate is estimated to decrease marginally to 5.2 per cent this year before rebounding to 5.7 per cent next year. Rashid highlighted a noticeable shift in South Asia's emergence as a significant driver of global growth, taking over from East Asia.
The report also commended India's economic policies, noting that despite relatively higher inflation, the country managed to maintain stable interest rates and fiscal support. Factors contributing to this stability include modernized tax collection systems and stable food and fuel prices, which aided in containing inflation.
However, the report also highlighted vulnerabilities, citing extreme weather conditions as a potential risk to South Asia's economic outlook.
Several international institutions, including the International Monetary Fund (IMF), World Bank, and Asian Development Bank (ADB), have projected India's growth rate for the current fiscal year around 6.3 per cent, with slight variations in estimates for the following fiscal year. These projections collectively indicate a positive outlook for India's economic growth in the foreseeable future.
(With Agency Inputs)
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