Fastest Growing Economy
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India Fastest Growing Economy in World: Check UN Report in 10 Points

A new report by the UN Department of Economic and Social Affairs states that India continues to be the fastest growing major economy, with a projected GDP growth of 6.2% in 2024. The ‘World Economic Situation and Prospects 2024’ highlights robust domestic demand and strong manufacturing and services growth in India.

The report notes that India’s growth is expected to moderately slow from 6.3% in 2023 to 6.2% in 2024, but remains highest among large economies. Here are the key takeaways about India’s growth projections as the fastest growing economy:

1. India Stays Ahead as Fastest Growing Economy

The UN report unequivocally states that India remains the fastest growing large economy globally. A growth rate projection of 6.2% for 2024 puts India’s economic expansion firmly ahead of other major economies.

This continues India’s consistent run as the world’s fastest growing economy for the last three years from 2021-2023. The Indian economy has showcased remarkable resilience in bouncing back swiftly from the COVID-19 shock.

2. Growth Driven by Domestic Demand and Manufacturing

The report highlights strong domestic demand and growth in the manufacturing and services sectors as the prime growth drivers. Government infrastructure projects and multinational investments continue to boost manufacturing.

India’s large consumer market supported by a burgeoning middle class is fueling consumer demand. The services sector remains buoyant, especially IT services, banking, insurance, and business process outsourcing.

3. Downward Risks for Other Large Asian Economies

The report notes most large Asian economies face downward growth pressures from multiple challenges like tight financial conditions, weaker current account balances, and climate factors.

Conversely, India is relatively insulated with its growth impetus coming from domestic consumption and investments. With inflation also on a downward curve, India’s growth foundations appear solid.

The UN report observes that manufacturing activity contracted in all major economies except India during Q3 2023, based on Purchasing Managers’ Index trends.

India was the only large country to witness continued expansion in manufacturing, underscoring its divergent growth path. This explains why India is projected as the fastest growing economy.

5. Gradual China Recovery

China’s economy is estimated to have rebounded in 2023 with 5.3% growth after lockdown-constrained expansion of just 3% in 2022.

But India is still projected to grow faster at 6.2% in 2024 compared to China’s estimated 4.5% growth. So India will continue leading large economies as the fastest growing.

6. India Resists Global Inflation Pressures

The report notes that global inflation eased from multi-decade highs in 2023 but remains above pre-pandemic levels. In India, inflation is forecast to gradually decline within the RBI’s target range of 2-6%.

Relative inflation stability coupled with growth sets India apart from other economies battling sustained inflationary headwinds along with slowdowns.

7. FDI Flows Boost Manufacturing Sector

According to the UN report, India has attracted strong foreign investment, especially in the manufacturing sector. Developed economies are adopting strategies to diversify supply chains beyond China.

This is benefiting India, with multinationals increasingly viewing it as an alternate global manufacturing hub. This results in job creation and technology transfers – boosting economic growth.

8. New Growth Paradigm for Developing Nations

The UN report highlights that India’s growth story reflects a new emerging paradigm for developing countries. Alongside progress in digitalization and clean energy, India is leveraging its demographic dividend.

Its young population is supporting increased consumption and labor force expansion – catalyzing structural transformation beneficial for long-term growth.

9. India Among Top FDI Recipients

The UNCTAD 2022 World Investment Report ranked India among the top 10 recipients of FDI globally, surpassing $85 billion in 2021. The report highlighted India’s rise in tech investment and emphasis on sustainable growth.

Such stable FDI inflows provide crucial capital for India’s development needs, especially financing manufacturing and infrastructure – key drivers for its tag as the fastest growing economy.

10. An Alternative Growth Model

The UN report emphasizes that India’s economic rise represents an alternate growth model through high savings and investment rates. This contrasts with consumption-led growth in advanced economies fueled by easy credit and growing household debt.

By focusing on capital formation and export competitiveness, India has carved its unique trajectory among developing economies to emerge as the world’s fastest growing major economy.

India: From Fragile to Fastest Growing Post-Pandemic

From the brink of recession amidst pandemic lockdowns, India has scripted an astonishing turnaround to consolidate its position as the fastest growing economy. Backed by strong domestic fundamentals, India is expected to continue on this high-growth path for years to come.

Structural reforms, digitalization push, and policy stability have all catalyzed India’s emergence as a global economic powerhouse. As the UN report highlights, India’s growth reinforces its progress in transitioning from a fragile to a fastest growing economy within a short span of time.

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