The UN’s flagship economic report presents a sombre economic outlook for the near term. Persistently high interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters pose significant challenges to global growth.
New Delhi: It is anticipated that India will continue to lead as the rapidly growing major economy, with a predicted expansion of 6.2% by 2024, as stated by the UN Department of Economic and Social Affairs. A modest decline has been foreseen from the earlier anticipated 6.3% of 2023. The report further clarifies the key drivers of the growth this year—primarily steep domestic demand along with surge in the realms of manufacturing and services, as per a report by NDTV.
UN Report On India’s Economic Development: Key Points
During the third quarter of 2023, a downturn hit every major global economy, save for India, as per the revelations from the manufacturing Purchasing Managers’ Index. Interestingly, India has been turning heads of multinational corporations as an effective alternative to redistribute their supply chains compared to the mature economies. As we look ahead, it’s foreseen that the global inflation will further slide down to 3.9 percent in 2024, catalyzed by a projected drop in global commodity prices and a slump in demand due to monetary constrictions.
Global economic growth is projected to slow from an estimated 2.7 per cent in 2023 to 2.4 per cent in 2024, trending below the pre-pandemic growth rate of 3 per cent, said the United Nations World Economic Situation and Prospects (WESP) 2024 launched on Thursday.
Global Economic Growth Prospects
The latest forecast comes on the heels of global economic performance exceeding expectations in 2023. However, last year’s stronger-than-expected GDP growth masked short-term risks and structural vulnerabilities.
The UN’s flagship economic report presents a sombre economic outlook for the near term. Persistently high interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters pose significant challenges to global growth.
The prospects of a prolonged period of tighter credit conditions and higher borrowing costs present strong headwinds for a world economy saddled with debt, while in need of more investments to resuscitate growth, fight climate change and accelerate progress towards the Sustainable Development Goals (SDGs).
“2024 must be the year when we break out of this quagmire. By unlocking big, bold investments we can drive sustainable development and climate action, and put the global economy on a stronger growth path for all,” UN Secretary-General Antonio Guterres said. “We must build on the progress made in the past year towards an SDG Stimulus of at least $500 billion per year in affordable long-term financing for investments in sustainable development and climate action.”
Growth in several large, developed economies, especially the US, is projected to decelerate in 2024 given high interest rates, slowing consumer spending and weaker labour markets.
The short-term growth prospects for many developing countries — particularly in East Asia, Western Asia, Latin America and the Caribbean — are also deteriorating because of tighter financial conditions, shrinking fiscal space and sluggish external demand.
Low-income and vulnerable economies are facing increasing balance-of-payments pressures and debt sustainability risks. Economic prospects for small island developing states, in particular, will be constrained by heavy debt burdens, high interest rates and increasing climate-related vulnerabilities, which threaten to undermine, and in some cases, even reverse gains made on the SDGs.
(With inputs from agencies)