The United Nations has upgraded India’s economic growth projection for the current year to 6.9 per cent raising it by 0.7 per cent from the forecast made in January 2024. This advancement makes India’s position as the world’s fastest-growing major economy. Hamid Rashid who is the chief of the UN’s Global Economic Monitoring Branch, says the upgrade is attributed to several factors, including lower inflation, robust exports, and increased foreign investments.
According to Rashid, India’s improved fiscal position is driven by significantly reduced inflation rates. Additionally, India benefits from strong export performance, with exports showing resilience. India is also witnessing a shift in foreign investments, with Western companies increasingly viewing it as an attractive alternative destination. Special import arrangements, such as those with Russia for oil, further contribute to India’s economic advantage.
The UN’s World Economic Situation and Prospects (WESP) report on the world’s economy talks about good things happening with jobs in India. It says there are more jobs now because the economy is doing well, and more women in South Asia are working too.India’s expected growth rate for next year stays at 6.6 percent. This follows strong growth rates of 7.5 percent last year and 7.7 per cent in 2022, as the economy bounced back from the slowdown caused by Covid.
Globally, the report has also revised the world economy’s growth projection to 2.7 per cent in which developing economies are outpacing developed ones. But not all developing countries are growing the same way; some are having problems like unstable politics, more expensive borrowing, and money value changes.
China is the next country after India that’s growing its economy quickly, and it’s expected to grow by 4.8%. Meanwhile, the US economy is expected to grow by 2.3 per cent this year. Even though the US is making its money rules stricter, the report says it’s less likely that the US economy will have a big problem.
In the future, the WESP report says that fast-changing technology can bring both good things and problems. It says we need to find ways to use new technology to make things better without causing issues like job losses or unequal access to technology.
India’s improved and upgraded economic growth projection shows the nation’s resilience and adaptability to withstand and overcome global economic challenges. The positive forecast brings numerous benefits to India’s economy and its citizens.
Firstly, the growth forecast shows India’s ability to leverage its strengths and capitalise on emerging opportunities in the global market. Lower inflation rates have eased fiscal constraints, which has allowed the government more flexibility in implementing economic policies and initiatives to support growth.
Increased foreign investments, particularly from Western companies, also show India’s attractiveness as a preferred investment destination. The surge in capital not only boosts economic activity but also fosters technology transfer, innovation, and job generation across diverse sectors. Additionally, strategic import agreements like those with Russia for oil highlight India’s proactive approach to securing vital resources and managing risks linked to fluctuations in commodity prices.
From a strategic standpoint, India’s position as the world’s fastest-growing major economy boosts its global reputation and attractiveness as a partner for trade, investment, and cooperation. With a strong economy, India gains credibility with investors and enhances its leverage in international negotiations and partnerships.
Continuous economic growth will also play a crucial role in reducing poverty, improving the standard of living, and promoting socio-economic progress throughout the nation. With increasing incomes and expanded opportunities, people and communities will be able to gain access to education, healthcare, and essential services. This will ultimately lead to the establishment of the groundwork for a more inclusive and fair society.
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