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Business News/ News / UNCTAD sees India's GDP growth slip to 6.5% in 2024 vs 6.7% in 2023: ‘RBI likely to keep interest rates constant’
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UNCTAD sees India's GDP growth slip to 6.5% in 2024 vs 6.7% in 2023: ‘RBI likely to keep interest rates constant’

UNCTAD pegged Indian economy's growth at 6.5% for 2024 against the 6.7% growth recorded the previous year. Strong public investment and services sector to drive growth this year.

UNCTAD projected that Indian economy's growth momentum will most likely decelerate in 2024 and will stand at 6.5%.Premium
UNCTAD projected that Indian economy's growth momentum will most likely decelerate in 2024 and will stand at 6.5%.

The United Nations Trade and Development (UNCTAD) projected that Indian economy's growth momentum will most likely decelerate in 2024 to 6.5% against the 6.7% growth recorded in the previous year. 

The report states, “The expansion in 2023 was driven by strong public investment outlays as well as the vitality of the services sector, which benefitted from robust local demand for consumer services and firm external demand for the country’s business services exports. These factors are expected to continue to support growth in 2024." 

Also read: IMF raises India FY25 GDP growth outlook to 6.8%

Thus, the factors that assisted the economy's growth by in 2023 will help the economy achieve a similar growth rate in the fiscal year 2024-25. The latest report released on April 16, revised India’s growth forecast by 0.3 percentage points. 

Also read: Global economy is picking up steam but poorest countries are falling behind: IMF

The global trade body noted, “In the outlook, an increasing trend of multinationals extending their manufacturing processes into India in an effort to diversify their supply chains will also have a positive impact on Indian exports, while moderating commodity prices will be beneficial to the country’s import bill," it noted.

The report stated the Reserve Bank of India (RBI) will most probably keep interest rates constant in the near term. Restrained public consumption spending will be offset by strong public investment expenditure, supporting India's growth, as per the report.

Also read: IMF Board Changes Lending Rules to Speed Up Debt Restructuring

The International Monetary Fund (IMF) also released a report on growth forecast on April 16. This report raised India’s GDP growth projection for the financial year 2024-25 by 30 basis points to 6.8%. The IMF, in its update to the World Economic Outlook (WEO), attributed domestic demand for the projected growth rate.

Also read: India GDP expected to grow 8% and above in March quarter and FY24, says FM Sitharaman

Given India’s performance in the first nine months of FY24, other international bodies also revised their growth estimates. India's growth stood at 8.2% between April-December 2023, according to government data.

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Published: 17 Apr 2024, 11:55 AM IST
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