India is a 'bright spot', says UN report

With all the handicaps, India's growth rate is higher in comparison to other G20 member countries. Elaborating further on the UN report, the official said that this is a sustainable growth rate for India.

New Delhi, Jan 27: Amidst the news stories of recession and employees being fired by the top tech companies like Facebook, Twitter, Amazon etc, India still stands a bright spot. According to the "World Economic Situation and Prospects 2023" report of the United Nations, India's GDP is projected to be at 5.8 percent in 2023 which, though slow given India's potential, is still at the higher side when compared with the other global economies.

The major reason behind the moderate GDP growth, according to the report, is higher interest rates and global economic slowdown. However, the next year, that is, 2024 would see India again on a higher growth path as the projected growth rate would be 6.7 percent. This would again make India the fastest-growing major economy globally.

India is on a strong footing

Releasing the report, Hamid Rashid from the UN Department of Economic and Social Affairs admits that India is a "bright spot" in the world economy. When he says that India is currently on a "strong footing", his thoughts are obviously based on the fact that the nation is expected to grow at 6.7% in the year 2024.

In fact, India has been growing at a faster pace but Covid-19 slowed it down significantly. However, with all the handicaps, India's growth rate is higher relative to other G20 member countries. Elaborating further on the report, the UN official said that this is a sustainable growth rate for India.

Rashid opines that India also has a significant number of people living in poverty. Therefore, according to him, the moderate to higher growth would be a great boost to rescue the significant population from the poverty levels. He is of the view that if India can sustain this growth rate in the near term, that would be good for the Sustainable Development Goals.

3 factors behind economic strength

The report also reveals the three major factors that are going to play pivotal roles in the moderate growth rate of the Indian economy. The first two are lower unemployment rate and lower inflation and the third is lower import bills. Talking about the unemployment rate the report claims that the unemployment rate has come down significantly in the last four years to 6.4%.

Similarly, India's inflation has eased quite significantly and the report claims that it would be about 5.5% in 2023 and even lower at 5% in 2024.