The UN Conference on Trade and Development (UNCTAD) upped India’s 2023 economic growth forecast to 6.6% from 6% predicted in April. However, it expects the country’s growth to slow to 6.2% in 2024.
In its trade and development report issued Wednesday, the UNCTAD said its expects growth of the world economic output to decelerate to 2.4% in 2023 but regis- ter a small uptick to 2.5% in 2024.
This comes a day after the World Bank projected India’s economy to grow 6.3% in FY24. India’s FY23 economic growth was 7.2%.
The multilateral body called for a change in policy direction, including by leading central banks, and accompanying institutional reforms promised during the Covid-19 crisis to avert a lost decade.
“The global economy is flying at ‘stall speed’, with projected growth in 2023 of 2.4%, meeting the conventional criteria for a global recession. The entire global economy, except East and Central Asia, has slowed since 2022,” UNCTAD said.
Highlighting that globally, the post-pandemic recovery is divergent, it said: “While some economies, including Brazil, China, India, Japan, Mexico, Russia and the United States, have demonstrated resilience in 2023, others face more formidable challenges”.
In India, the external sector-alongside the private and government sector has contributed to domestic growth, partly helped by many countries redirecting trade flows away from the Russian Federation, with which India maintains a direct relationship, the Geneva-based organisation said.
While growth in 2022 moved back in line with pre-pandemic rates, it is expected to continue into next year, according to the report.
“However, other indicators still suggest caution: with rates of unemployment still standing at 8.5% in June 2023, employment remains disappointingly low by historical standards. Inequality has also significantly increased – as suggested by data on real wages and the labour share which could hinder growth,” UNCTAD said.
It highlighted that India’s 10 largest firms account for 8% of its total exports, although the total number of exporting firms exce- eded 123,000 in 2021.
As per the report, South-South trade accounted for around 54% of South’s total trade in 2022.