World Economic Situation and Prospects (WESP) report

Context: UN report has revised India’s 2024 GDP growth forecast

Key highlights:

- The United Nations has revised India's GDP growth forecast for the year 2024 to 6.2%, down from the earlier estimate of 6.7%.

- The revision is attributed to the projection of robust domestic demand and strong growth in the manufacturing and services sectors.

- The larger South Asian region is estimated to have grown by 5.3% in 2023 and is expected to increase by 5.2% in 2024, with India being the fastest-growing large economy globally.

- China's investment prospects face challenges from a struggling property sector, while India positions itself as an alternative investment destination.

- FDI flows to India rose by 10% in 2022, making it the third-largest host country for announced greenfield projects.

- Global merchandise trade and industrial production remain weak, with India being an exception, as indicated by the manufacturing Purchasing Managers’ Index.

- Slowing global demand, trade tensions, and geopolitical conflicts are impacting trade flows, influenced by the war in Ukraine and sanctions on Russia.

- Climate change-related events, such as droughts and above-average rainfall, have affected the South Asian region in 2023.

- The 2023 GDP growth projection for India was revised upwards by 0.5 percentage points to 6.3%.

About the report:

• The report is released jointly by the United Nations Department of Economic and Social Affairs(UN/DESA), United Nations Conference on Trade and Development(UNCTAD) and the five United Nations regional commissions.

UNCTAD

• It was established in 1964, is a permanent intergovernmental body under the United Nations General Assembly.
• It operates as part of the UN Secretariat and is also associated with the United Nations Development Group (UNDP).
• While reporting to the UN General Assembly and the Economic and Social Council, UNCTAD has its own membership, leadership, and budget.
• The organization's headquarters are located in Geneva, Switzerland.
• UNCTAD produces various reports, including the Trade and Development Report, World Investment Report, Technology and Innovation Report, and Digital Economy Report.

Purchasing Managers’ Index

• The Purchasing Managers' Index (PMI) is an economic gauge obtained through monthly surveys of diverse companies.
• It assesses activity at the purchasing or input stage, distinct from industrial production, which reflects actual production.
• The two main types of PMI are Manufacturing PMI and Services PMI. It does not encompass informal sector activities.
• S&P Global, a global leader in financial information and analytics, releases PMI data for India. IHS Markit used to publish the PMI data for India before its merger with S&P.
• The Manufacturing PMI evaluates the performance of India's manufacturing sector based on a survey of approximately 500 manufacturing companies.