Strong investment, private consumption driving India’s growth: UNCTAD

New Delhi: Indian economy is expected to record a growth of 6.8 per cent in 2024 and will clock an expansion of 6.3 per cent next year.

This comes on the back of continued strong public and private investment and consumption as well as rising exports of services, according to the latest UNCTAD (UN Trade and Development) report.

Despite the increased exports of services and certain goods, such as chemicals and pharmaceuticals, the structural current account deficit in India will persist, owing to relatively weaker external demand and high fossil energy import bills, the report observes.

As the world’s most populous country and third-largest energy consumer, India is simultaneously expanding its domestic non-fossil and fossil fuel energy supply to support growing economic output, the report adds.

It also points out that as inflation is expected to decline to 4 per cent by the end of the year, the Reserve Bank of India may initiate monetary easing and trim its policy rate, it noted. UNCTAD had a projected growth rate of 7.7 per cent for India last year. The report states that the GDP growth of India appears stable at 6 per cent, with an accompanying inflation rate of 4 per cent.

The UNCTAD report comes close on the heels of an IMF report which states that India remains the world’s fastest-growing economy with investment and private consumption driving growth.

The IMF’s latest Regional Economic Outlook for Asia-Pacific, released this week, states that growth in Asia is expected to slow down in 2024 and 2025— reflecting fading support from the pandemic recovery and factors like ageing — short-term prospects were more favourable than expected in April.

Earlier the IMF, in its World Economic Outlook report released on October 2, had retained India’s gross domestic product (GDP) growth forecasts at a robust 7 per cent and 6.5 per cent for FY25 and FY26, respectively.