India gaining on investments at China’s loss: UN DESA

United Nations: India registered very robust economic growth performance and has become an alternative investment destination for many western companies as less and less foreign investment is going into China, an expert at the UN said as the global body revised upwards the Indian GDP growth for 2024.

“India is also benefiting from more investments coming into India from other western sources as less and less foreign investment is going into China, western investment is going into China. India has become an alternative investment source or destination for many western companies. I think that is also benefiting India,” Hamid Rashid, Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN Department of Economic and Social Affairs (UN DESA), told reporters here.

He was briefing on the mid-year update of the World Economic Situation and Prospects 2024 that has revised upwards India’s growth projections for 2024, with the country’s economy now forecast to expand by close to seven per cent this year.

The World Economic Situation and Prospects as of mid-2024, released Thursday, said, “India’s economy is forecast to expand by 6.9 per cent in 2024 and 6.6 per cent in 2025, mainly driven by strong public investment and resilient private consumption. Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly.”

The 6.9 per cent economic growth projections for India in the mid-year update is an upward revision from the 6.2 per cent GDP forecast made by the UN in January this year.

On the Indian economic outlook, Rashid said “I think the drivers are very simple. Indian inflation has come down significantly. And that means that the fiscal position is not as constrained as in other countries and there is both support on the monetary side and the fiscal side in terms of stimulating growth.”

He noted that in India “already the growth momentum actually was from last year and is continuing and also India’s export has been pretty robust”.

“So I think given all these factors, this improvement is a very reasonable modest upward revision that we have done, given that what we see is happening in the Indian economy right now,” he added.

He further said the oil price and special import arrangements that India has with Russia is also “helping India tremendously in terms of keeping its import costs down”.