The finance ministry on Thursday said India continues to be the fastest-growing major economy with positive assessments of India’s growth outlook for the current financial year by international organisations and the RBI.
“Global economic growth recovery is underway in major economies, although disparities persist. While the leading indicators signal increased economic activity and geopolitical tensions have eased slightly, recent conflicts continue to pose risks. Despite the global challenges, India stands out with its strong economic performance, highlighting broadbased growth across sectors and asserting its pivotal role in supporting the global growth trajectory,” according to the ‘Monthly Economic Review March 2024’ released by the finance ministry on April 25.
The International Monetary Fund (IMF) in its April 2024 World Economic Outlook has revised upwards its estimate of India’s real GDP growth for FY2023-24 to 7.8 per cent from 6.7 per cent in its January 2024 update and 6.3 per cent in its October 2023 WEO.
RBI projects real GDP growth of 7 per cent for 2024-25, driven by rural deman and manufacturing.
“Overall, India continues to be the fastest-growing major economy with positive assessments of the growth outlook for the current financial year, for India by international organisations and RBI,” it said.
March 2024 sees record-breaking stock market performance and remarkable GST collections in India, the report said.
Inflation Situation
Global inflation remains contained overall and has declined in most regions, but the recent uptick in inflationary pressures across nations along with persistence in core inflation warrants attention, it said.
“In India, the government and the RBI’s efforts to combat inflation, including calibrated policy rates, strengthening food buffers, and easing imports, have ensured effective inflation management,” the finance ministry said in the report.
Retail inflation in India has reached its lowest level since the pandemic, it said. FY2023-24 closes with a low inflation rate of 4.85 per cent in March 2024, the lowest in the past 10 months, reflecting a stable economic environment.
Global Trade
Slowing global trade, as indicated by the United Nations Conference on Trade and Development (UNCTAD), presents a challenging landscape for economies worldwide, the report added.
“Despite these headwinds, India’s trade deficit is expected to decline in the coming years as the PLI scheme deepens its coverage and extends to other sectors. Driven by strong exports and resilient remittances, various international agencies and RBI expect the CAD to GDP ratio to have moderated below 1 per cent in FY2023-24,” it said.
Strategic trade agreements like the India-EFTA Trade and Economic Partnership Agreement (TEPA) also signal India’s commitment to expanding its global trade footprint and leveraging international partnerships for sustained economic growth, according to the report.
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