Geneva: The UN has raised India’s growth forecast for this year by 0.7 percent to 6.9 percent, making it the world’s fastest growing major economy.
Hamid Rashid, head of the UN’s global economic monitoring branch, said that the Indian economy is growing at a fast pace due to low inflation, strong exports and increase in foreign investment.
“Inflation has come down significantly. This means the fiscal position is not as constrained as in other countries,” he said.
Rashid said exports have been “quite strong” and India is also benefiting from investments coming from other Western countries, while inflows into China are slowing.
“India has become an alternative investment destination for many Western companies,” he said.
He said another factor benefiting India is India’s special import arrangement for oil with Russia, which is reducing costs.
The World Economic Situation and Prospects (WESP) report also has a positive outlook on employment. Labor market indicators have also improved amid strong growth and high labor participation in India, it said. It said that women’s labor force participation has increased, especially in South Asia.
India’s growth forecast for the next year remains at 6.6 percent. The WESP report said India’s economy grew by 7.5 percent last year and 7.7 percent in 2022.
The report also revised the estimate for the world economy this year to 2.7 percent, which is 0.3 percent more than January.
“Most major economies have managed to reduce inflation without precipitating recession by reducing unemployment. Geopolitical risks will continue to challenge economic growth,” the report warned.
Overall, developing economies are growing faster than developed economies – at a rate of 4.1 percent. However, the WESP report notes that growth is not uniform across developing countries.
It said large developing economies such as India, Indonesia and Mexico are benefiting from strong domestic and external demand, while many African, Latin American and Caribbean economies are lagging due to “protracted political instability”, high borrowing costs and exchange rates. Are.
China’s economy is projected to grow 4.8 percent this year, making it the second fastest growing major economy. The US economy is expected to grow 2.3 percent this year. “The United States economy is better than ever,” the report said.
