New Delhi, May 17 (KNN) According to a United Nations expert, Western companies are increasingly favouring India over China as an investment destination, contributing to the country's "very robust" economic growth prospects.

Hamid Rashid, Chief of the Global Economic Monitoring Branch at the UN Department of Economic and Social Affairs (UN DESA), stated that "less and less foreign investment is going into China," while India has emerged as "an alternative investment source or destination for many Western companies."

In its mid-year update of the World Economic Situation and Prospects 2024, the UN raised India's economic growth forecast for 2024 to 6.9 per cent, up from the previous estimate of 6.2 per cent. This upward revision is attributed to strong public investment, resilient private consumption, and India's appeal as an investment hub for Western firms.

Rashid cited declining inflation in India as a key factor, easing fiscal constraints and enabling monetary and fiscal stimulus measures. He also highlighted the country's robust export performance, particularly in pharmaceuticals and chemicals, despite subdued global demand for merchandise exports.

The UN report projects India's consumer price inflation to moderate from 5.6 per cent in 2023 to 4.5 per cent in 2024, remaining within the central bank's medium-term target range of 2 per cent to 6 per cent. However, food prices remained elevated in the first quarter of 2024, especially in Bangladesh and India.

While the outlook for China has been slightly improved, with growth now expected to be 4.8 per cent in 2024 compared to the previous forecast of 4.7 per cent, the UN cautioned that the property sector poses a significant downside risk to the Chinese economy.

Rashid expressed confidence in the UN's growth projections for India, stating, "We saw very robust growth performance in India, also in Brazil, and some other large developing economies." He added, "India has done remarkably well, and we see quite a bit of improvement in the growth outlook for India."

(KNN Bureau)