WORLD ECONOMIC SITUATION AND PROSPECTS 2024 REPORT

Context

• In 2024, India is expected to achieve a growth rate of 6.2%, driven by robust domestic demand and growth in the manufacturing and services sectors, according to the United Nations report.

About the Report

1. Published by the United Nations Department of Economic and Social Affairs (UN DESA) in collaboration with the United Nations Conference on Trade and Development (UNCTAD) and five United Nations regional commissions.
2. The global economy faces various crises, impacting progress towards the Sustainable Development Goals (SDGs).
3. The report emphasizes the need for a more inclusive and resilient global economy in 2024.

Highlights of the Report

1. Global Economy:

1. Global economic growth is expected to slow from an estimated 2.7% in 2023 to 2.4% in 2024, falling below the pre-pandemic growth rate of 3%.
2. In 2023, the global economy did better than expected, but there are still problems and weaknesses, especially for poor countries.
3. Global merchandise trade and industrial production remain weak and the manufacturing Purchasing Managers’ Index is shrinking in most big countries, except India.
4. Factors such as slowing global demand, trade tensions, and geopolitical conflicts, including the war in Ukraine, influence trade flows.
5. Climate change events, like droughts, significantly affected South Asia in 2023, impacting India, Nepal, and Bangladesh.
6. After the pandemic, the global job market is seeing different directions. Developed countries are getting better with low unemployment, but challenges like income losses and not enough workers are still there.
7. Global inflation, a significant concern, is showing signs of easing.
8. Rising debt levels pose a critical challenge to debt sustainability, particularly for developing countries.

2. Indian Economy:

1. The UN revised India’s Gross Domestic Product (GDP) growth forecast for 2024 to 6.2% from the previous estimate of 6.7%.
2. In 2023, the bigger South Asian area grew by 5.3%, and it's expected to grow by 5.2% in 2024, with India being the fastest-growing large economy worldwide.
3. India's economy is predicted to grow by 6.6% in 2025 due to strong public investment and resilient private consumption.
4. In 2022, FDI flows to India increased by 10%, making it the third-largest recipient country for announced greenfield projects.
5. Increased government spending on infrastructure projects like roads, railways, and renewable energy is driving fixed capital formation.
   • Gross fixed capital formation (GFCF) is the total amount of money spent on investment.
6. Developing countries, including India, face challenges in accessing financing due to increasing external debt and interest rates.
7. India's labor market is showing improvement, with a higher labor force participation and the lowest unemployment rate (7.1%) in a year.
8. Consumer price inflation in India is expected to decrease, aligning with the Central Bank's target range of 2 to 6 percent. Top of Form

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