Inflation in India is expected to come down to 5.5 percent in 2023.
United Nations:
India’s economy is expected to grow by 6.7 per cent in calendar year 2024, supported by domestic demand, according to a United Nations report, which said high interest rates and weak external demand will hamper investment and exports for the country this year. But the load will continue.
The World Economic Situation and Outlook till mid-2023 was released on Tuesday, stating that India’s economy, the largest in the South Asian region, is expected to grow by 5.8 per cent in 2023 and 6.7 per cent in 2024 (calendar year basis). Is. Elastic domestic demand.
However, high interest rates and weak external demand will continue to weigh on investment and exports in 2023.
Inflation in India is expected to ease to 5.5 percent in 2023 as global commodity prices moderate and slow currency depreciation lowers imported inflation.
India’s economic growth projections in the mid-year assessment remained unchanged from those made in the World Economic Situation and Prospects 2023 report released in January this year.
The flagship report released in January said India’s GDP is projected to moderate to 5.8 per cent in 2023 as high interest rates and a global economic slowdown weigh on investment and exports.
India’s economic growth is expected to remain “strong”, even though the outlook for other South Asian countries is “more challenging”. The flagship report states that India is projected to grow at 6.7 per cent in 2024, the fastest growing major economy in the world.
At a press conference, Hamid Rashid, head of the Economic Analysis and Policy Division, the United Nations Department of Economic and Social Affairs, the global economic monitoring arm, said India was a “bright spot” in the world economy.
Responding to a PTI question on the trajectory of the Indian economy, Rashid said on Tuesday, “India remains a bright spot.” Our projections for India haven’t changed since January and we see a number of positives, including inflation coming down significantly. “We are very confident with our forecast for the year right now,” he said.
India’s inflation is around 5.5 percent while the regional average for South Asia is 11 percent. Rashid said this means that there will be significant room for both fiscal expansion and monetary accommodation and this will support domestic demand.
However, he added that the risks are on the outside. He said that if the external financing situation worsens further and becomes very tight, then India will face some challenges and exports may face some challenges going forward.
The mid-year assessment said prospects for a strong global economic recovery are dim amid stubborn inflation, rising interest rates and rising uncertainties.
Instead, the world economy faces a longer-term risk of lower growth as the lingering effects of the COVID-19 pandemic, the ever-worsening effects of climate change, and unresolved macroeconomic structural challenges remain.
According to the report, the world economy is now projected to grow by 2.3 percent in 2023 (0.4 percentage points from the January forecast) and 2.5 percent in 2024 (-0.2 percentage points), a modest increase in global growth forecasts. 2023.
In the US, resilient household spending has prompted an increase in growth forecast to 1.1 per cent in 2023. The EU economy – boosted by lower gas prices and strong consumer spending – is now forecast to grow by 0.9 percent, the report said.
China’s growth this year is now forecast at 5.3 percent, compared to 4.8 percent projected earlier this year, as a result of the lifting of restrictions related to COVID-19.
“The current global economic outlook presents an urgent challenge to meeting the SDGs,” said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs.
“The global community must urgently address the growing lack of funds faced by many developing countries, strengthen their capacities to make significant investments in sustainable development, and transform their economies to achieve inclusive and sustainable long-term growth.” They should be helped.” Global trade remains under pressure from geopolitical tensions, weak global demand and tighter monetary and fiscal policies. The volume of global trade in goods and services is projected to grow by 2.3 percent in 2023, well below the pre-pandemic trend.
The mid-year report said central banks in South Asia continued to raise their interest rates through early 2023 to combat inflation and stabilize exchange rates. However, the Reserve Bank of India kept the policy rate unchanged at 6.5 per cent in April 2023, after a cumulative hike of 250 basis points since May 2022.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)