India's economic growth is projected to reach 6.2 per cent in 2024
India remains the fastest-growing large economy and its growth is projected to reach 6.2 per cent in 2024, according to the World Economic Situation and Prospects 2024 report published by the UN Department of Economic and Social Affairs.
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Though India's growth is projected to reach 6.2 per cent in 2024, it slightly lower than the 6.3 per cent estimated for 2023. This year's growth will be supported by robust domestic demand and strong growth in the manufacturing and services sectors, the UN report said.
China face headwinds from a struggling property sector, though government-led infrastructure investments are partially offsetting the shortfall in private investments. In contrast, India registered strong investment performance in 2023, driven by government infrastructure projects and multinational investments.
In the third quarter of 2023, the manufacturing Purchasing Managers' Index - a leading indicator of economic activity - was in contraction territory in all of the world's largest economies except India.
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 income shares of the top 10 per cent increased in a number of large developing countries that received substantial capital inflows, including South Africa and India.
Climate change-related events continued to have an adverse impact on the region in 2023. Droughts intensified considerably during July and August, affecting most of India, Nepal and Bangladesh, while Pakistan recorded above-average rainfall.
In India, August was one of driest months in four decades, impacting the production of key staple crops in the most affected areas.
Against the backdrop of lingering risks and uncertainties, global gross domestic product (GDP) growth is projected to slow from an estimated 2.7 per cent in 2023 to 2.4 per cent in 2024.
While the world economy avoided the worst-case scenario of a recession in 2023, a protracted period of low growth looms large. Growth is forecast to improve moderately to 2.7 per cent in 2025, but will remain below the pre-pandemic trend growth rate of 3 per cent.
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