United Nations: India registered ‘very robust” economic growth performance and has become an alternative investment destination for many Western companies as “less and less” foreign investment is going into China, an expert at the UN said as the global body revised upwards the Indian GDP growth for 2024.

“India is also benefiting from more investments coming into India from other Western sources as less and less foreign investment is going into China, Western investment is going into China. India has become an alternative investment source or destination for many Western companies. I think that is also benefiting India,” Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN Department of Economic and Social Affairs (UN DESA), Hamid Rashid, told reporters here Thursday.

He was briefing on the mid-year update of the World Economic Situation and Prospects 2024 that has revised upwards India’s growth projections for 2024, with the country’s economy now forecast to expand by close to seven per cent this year.

The World Economic Situation and Prospects as of mid-2024, released Thursday, said, “India’s economy is forecast to expand by 6.9 per cent in 2024 and 6.6 per cent in 2025, mainly driven by strong public investment and resilient private consumption. Although subdued external demand will continue to weigh on merchandise export growth, pharmaceuticals and chemicals exports are expected to expand strongly.”

The 6.9 per cent economic growth projections for India in the mid-year update is an upward revision from the 6.2 per cent GDP forecast made by the UN in January this year.

On the Indian economic outlook, Rashid said “I think the drivers are very simple. Indian inflation has come down significantly. And that means that the fiscal position is not as constrained as in other countries and there is both support on the monetary side and the fiscal side in terms of stimulating growth.”

He noted that in India “already the growth momentum actually was from last year and is continuing and also India’s export has been pretty robust’. ‘So I think given all these factors, this improvement is a very reasonable modest upward revision that we have done, given that what we see is happening in the Indian economy right now,” he added.

He further said the oil price and special import arrangements that India has with Russia is also “helping India tremendously in terms of keeping its import costs down’. ‘So overall, I think we are very comfortable with the numbers that we have for India,” he added.

Rashid said that “we saw very robust growth performance in India, also in Brazil, and some other large developing economies” and added that India has done “remarkably well” and ‘we see quite a bit of improvement in the growth outlook for India – 6.9 per cent this year and 6.6 per cent next year, so that is looking good at this point.”

Most of the growth and positive outlook within the developing economies is driven by South Asian, and East Asian economies, he added.

The update said that consumer price inflation in India is projected to decelerate from 5.6 per cent in 2023 to 4.5 per cent in 2024, staying within the central bank’s 2 to 6 per cent medium-term target range. Similarly, inflation rates in other South Asian countries declined in 2023 and are expected to decelerate further in 2024, ranging from 2.2 per cent in the Maldives to 33.6 per cent in Iran. Despite some moderation, food prices remained elevated in the first quarter of 2024, especially in Bangladesh and India.