The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices.

<h2>About India’s growth forecast</h2>

According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent.&nbsp;

The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.”&nbsp;

ALSO READ |<a href="https://www.wionews.com/india-news/cancel-culture-to-370-seats-key-takeaways-from-pm-modis-parliament-speech-687202">&nbsp;'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech</a>

India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum.&nbsp;

The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year.&nbsp;

<h2>What about global growth?</h2>

According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast.&nbsp;

Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated.&nbsp;

“The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement.&nbsp;

The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation.&nbsp;

The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent.&nbsp;

<h2>The Middle East factor</h2>

According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures.&nbsp;

Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/federal-reserve-chair-powell-signals-prudence-in-considering-rate-cuts-amid-strong-economy-687124">Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy</a>

“High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report.&nbsp;

Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference.&nbsp;

The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year.&nbsp;

(With inputs from agencies) 
&nbsp;

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well.

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices. About India’s growth forecast According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent. The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.” ALSO READ | 'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum. The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year. What about global growth? According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast. Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated. “The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement. The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation. The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent. The Middle East factor According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures. Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis. ALSO READ | Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy “High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report. Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference. The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year. (With inputs from agencies)

OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'

India has the potential to grow at a reasonably high level in the next decade or two, owing to some structural changes by the government and a turnaround in the global economy, Finance Minister Arun Jaitley said today.

The whole environment of doing business has changed in a matter of months, Jaitley told a Washington audience at an event organised by the US-India Strategic and Partnership Forum.

&quot;India has the potential to grow at a reasonably high level in the next one-two decades. This is mainly because of the series of structural reforms being carried out by the government, turnaround in the global economy, and the massive investment opportunity that the infrastructure sector offers,&quot; said Jaitley.

&quot;I am certain that now that the growth is returning back to the world, the future holds an important direction as far as India is concerned. The sheer size of the country and economy would offer huge opportunity for investment in India in the next few years,&quot; he said.

Jaitley said that when the BJP government came to power in 2014, it had the choice to look the other way and allow the shadow economy to continue.

&quot;But it did not do so, as it took a series of courageous steps which ultimately culminated in demonetisation of high- value currency,&quot; the finance minister said.

The government knew that there would be short-term impact on the economy, Jaitley said, &quot;but, in the long term, it would benefit the country,&quot; he told a gathering of investors and corporate leaders.

In an effort to pitch India as an investor-friendly destination, the finance minister said that his government had taken a series of steps to improve the ease of doing business.

&quot;India today is one of the most open, globally integrated economy. In the last few years, we are moving up the ease of doing business ranking,&quot; he said, as he listed out some of the key initiatives by his government.

Among these are the &quot;massive steps&quot; that the Indian government has taken in using new digital technologies for governance and making them beneficial to the people, Jaitley said.

&quot;Today, almost everyone is connected to the banking system. Almost every adult in India has biometric. The integrated data has helped the government to reach every citizen on digital platform,&quot; he said.

&quot;This has helped us save billions of dollars,&quot; he said, adding that India is now using technology &quot;in a big way&quot; in order to ensure that the resources reaches the intended population.

Speaking about the Goods and Services Tax (GST), Jaitley said it was &quot;a more efficient system which has brought the country together, even economically, allowed free flow of goods and services across the country.&quot;

However, he conceded, that it could cause disruption for a quarter or two.

The event closed a week of meetings that the minister attended in the US, including the annual meetings of the International Monetary Fund and the World Bank.

Members of the USISPF audience included senior representatives from companies such as Apple, Boeing, Google, etc. While senior officials from different departments of the US government also participated in the programme.

Mukesh Aghi, president of USISPF, noted the importance of the minister?s visit, saying India had witnessed vast reforms and gained an ability for significant economic growth in the last few years thereby opening it to huge investment potential.

&quot;US companies and investors are very much aware of the reforms the Indian government is making in order to expand the economy,&quot; he said.

&quot;With future reforms and increased partnership between US and Indian businesses, there is promising potential for this already important relationship,&quot; he said.&nbsp; 
&nbsp;

The finance minister attributed the high potential for growth to structural changes by the government and a turnaround in the global economy

India has the potential to grow at a reasonably high level in the next decade or two, owing to some structural changes by the government and a turnaround in the global economy, Finance Minister Arun Jaitley said today. The whole environment of doing business has changed in a matter of months, Jaitley told a Washington audience at an event organised by the US-India Strategic and Partnership Forum. "India has the potential to grow at a reasonably high level in the next one-two decades. This is mainly because of the series of structural reforms being carried out by the government, turnaround in the global economy, and the massive investment opportunity that the infrastructure sector offers," said Jaitley. "I am certain that now that the growth is returning back to the world, the future holds an important direction as far as India is concerned. The sheer size of the country and economy would offer huge opportunity for investment in India in the next few years," he said. Jaitley said that when the BJP government came to power in 2014, it had the choice to look the other way and allow the shadow economy to continue. "But it did not do so, as it took a series of courageous steps which ultimately culminated in demonetisation of high- value currency," the finance minister said. The government knew that there would be short-term impact on the economy, Jaitley said, "but, in the long term, it would benefit the country," he told a gathering of investors and corporate leaders. In an effort to pitch India as an investor-friendly destination, the finance minister said that his government had taken a series of steps to improve the ease of doing business. "India today is one of the most open, globally integrated economy. In the last few years, we are moving up the ease of doing business ranking," he said, as he listed out some of the key initiatives by his government. Among these are the "massive steps" that the Indian government has taken in using new digital technologies for governance and making them beneficial to the people, Jaitley said. "Today, almost everyone is connected to the banking system. Almost every adult in India has biometric. The integrated data has helped the government to reach every citizen on digital platform," he said. "This has helped us save billions of dollars," he said, adding that India is now using technology "in a big way" in order to ensure that the resources reaches the intended population. Speaking about the Goods and Services Tax (GST), Jaitley said it was "a more efficient system which has brought the country together, even economically, allowed free flow of goods and services across the country." However, he conceded, that it could cause disruption for a quarter or two. The event closed a week of meetings that the minister attended in the US, including the annual meetings of the International Monetary Fund and the World Bank. Members of the USISPF audience included senior representatives from companies such as Apple, Boeing, Google, etc. While senior officials from different departments of the US government also participated in the programme. Mukesh Aghi, president of USISPF, noted the importance of the minister?s visit, saying India had witnessed vast reforms and gained an ability for significant economic growth in the last few years thereby opening it to huge investment potential. "US companies and investors are very much aware of the reforms the Indian government is making in order to expand the economy," he said. "With future reforms and increased partnership between US and Indian businesses, there is promising potential for this already important relationship," he said.

India has high growth potential for next two decades: Arun Jaitley

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OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'

India has high growth potential for next two decades: Arun Jaitley