Solid domestic demand growth to continue in India for next 2 years: OECD
Sep 27, 2024
New Delhi [India], September 27 : Economic growth in the emerging market G20 economies, including India, is expected to remain stable, said the Organisation for Economic Co-operation (OECD) in its latest report.
The Paris-based research body said domestic demand growth in emerging economies like India and Indonesia will continue.
"Solid domestic demand growth is projected to continue in India and Indonesia over the next two years," said the OECD report
OECD has also upwardly revised India's GDP growth by 10 basis points and has pegged at 6.7 per cent in 2024-25 and by 20 basis points for 2025-26 at 6.8 per cent.
Indonesia is projected to grow by 5.1 per cent in 2024 and 5.2 per cent in 2025.
India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.
Many global rating agencies and multilateral organizations have also revised India's growth forecasts upwards.
In China, the growth is expected to be supported through the second half of 2024 by an increase in government spending following a recent rise in local government bond issuance.
"Even so, the protracted correction in the real estate sector is anticipated to continue and inadequate social safety nets and soft consumer confidence will remain a drag on private consumption growth, with GDP growth projected to be 4.9 per cent in 2024 and 4.5 per cent in 2025," the OECD report read.
Brazil is anticipated to maintain some of the solid economic momentum observed through the first half of 2024, helped by higher fiscal spending.
Growth has also been relatively robust in many G20 countries including the United States, Brazil, India, Indonesia and the United Kingdom.
Aggregate consumer price inflation for the G20 economies is projected to decline markedly, helped by lower commodity prices and easing service price inflation as labour cost pressures moderate.
Headline inflation in the G20 is projected to fall from 6.1 per cent in 2023, to 5.4 per cent in 2024 and 3.3 per cent in 2025.
"Inflation in the emerging-market economies is projected to remain generally higher than in the advanced economies, while also easing gradually," the OECD report added.
Inflation is projected to be back to target in most G20 countries by the end of 2025, OECD said.
