India expected to grow 6.2% in 2024: United Nations report

Economic growth in India is projected to reach 6.2 per cent in 2024, slightly lower than the 6.3 per cent estimate for 2023, amid robust domestic demand and strong growth in the manufacturing and services sectors, the United Nations' World Economic Situation and Prospects 2024 report said on Friday.

Gross domestic product in South Asia grew by an estimated 5.3 per cent in 2023 and is projected to increase by 5.2 per cent in 2024, driven by a robust expansion in India, which remains the fastest-growing large economy in the world.

"Growth in several economies in the region will face downward pressures from tighter financial and fiscal conditions, balance-of-payments challenges, and the return of the El Nino climate phenomenon," the report said.

India, however, registered strong investment performance in 2023, driven by government infrastructure projects and multinational investments.

"Investment has been more resilient in developing economies than in developed economies. Investment in South Asia, particularly in India, remained strong in 2023. India is benefiting from growing interest from multinationals, which see the country as a key alternative manufacturing base in the context of developed economies' supply chain diversification strategies," the report said.

Global inflation is projected to decline further, from an estimated 5.7 per cent in 2023 to 3.9 per cent in 2024. But price pressures are still elevated in many countries and any further escalation of geopolitical conflict will add to that.

In about a quarter of all developing countries, annual inflation is projected to exceed 10 per cent in 2024, the report highlighted.

"Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries," said Li Junhua, Head of the UN's Department of Economic and Social Affairs (DESA).

"It is absolutely imperative that we strengthen global cooperation and the multilateral trading system, reform development finance, address debt challenges and scale up climate financing to help vulnerable countries accelerate towards a path of sustainable and inclusive growth."