India has emerged as a standout performer in the global economic landscape, with projections indicating that it is likely to maintain its position as the world’s fastest-growing major economy in 2024. The country’s robust growth has been attributed to factors such as growing demand, moderate inflation, a stable interest rate regime, and strong foreign exchange reserves.
Despite challenging global conditions and geopolitical tensions, India’s gross domestic product (GDP) expanded by 6.1% in the March quarter of 2023, followed by growth rates of 7.8% in the June quarter and 7.6% in the September quarter. For the first half of the fiscal year, the growth stood at an impressive 7.7%. The momentum is expected to continue in the December quarter, positioning India ahead of China as the fastest-growing major economy.
According to the latest projections from the Organization for Economic Cooperation and Development (OECD), India is expected to record a growth rate of 6.3% in 2023, outpacing China and Brazil. Looking ahead to 2024, the OECD anticipates India’s growth to reach 6.1%, again surpassing China, which is projected to grow at 4.7%. In contrast, major economies like the US, UK, and Japan are expected to experience either a slowdown or minimal growth in the coming year.
Ashima Goyal, a Member of the Reserve Bank of India’s Monetary Policy Committee (MPC), highlighted India’s resilience in the face of external shocks, attributing it to the country’s increasing economic diversity and effective policy measures. Goyal emphasized the importance of equipping people with skills and assets to sustain India’s growth trajectory in 2024 and beyond.
Dharmakirti Joshi, Chief Economist at rating agency Crisil, cautioned that geopolitical developments could pose challenges to India’s domestic demand in the upcoming year. Despite this, Crisil expects India’s GDP to grow at 6.4% in the next fiscal year, slightly lower than the current rate. Joshi noted that the lagged impact of interest rate hikes and the global economic slowdown could be key factors affecting India’s growth.
A recent article by the Reserve Bank of India (RBI) acknowledged India’s resilience amid significant global headwinds, highlighting the country’s status as the fastest-growing major economy in 2023. The article expressed a sense of cautious optimism, citing positive consumer confidence and improved perceptions about current income based on the RBI’s latest household survey in November 2023.
