NEW YORK: Overcoming the slowdown from demonetisation, the growth rate of India’s economy is projected to accelerate from this year’s 6.7 per cent to 7.2 per cent next year and 7.4 per cent in 2019 making it again the world’s fastest growing major economy, the UN said on Monday.
“Despite the slowdown observed in early 2017 and the lingering effects from the demonetisation policy, the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms,” according to the World Economic Situation and Prospects 2018 report.
However, the 7.2 per cent growth rate projected for India next year in the latest report is lower than the mid-year update’s projection made by the UN in May of 7.9 per cent.
China’s economic growth for this year was 6.8 per cent, according to the report, putting it slightly ahead of India.
But the growth projections for China is 6.5 per cent next year and 6.3 per cent in 2019 Releasing the report, Under Secretary-General for Economic and Social Affairs, Liu Zhenmin, said: “The upturn in global growth is a welcome sign of a healthier economy.”
The report painted a rosier outlook for the world economy overall, saying “it has strengthened as lingering fragilities related to the global financial crisis subside” and recorded this year the “highest growth rate since 2011,” even though it is only 3 per cent.
The report said that growth level is expected to continue over the next two years.
South and East Asia remain the world’s most “dynamic regions” accounting for nearly half of global growth in 2017, with China alone contributing about one-third, the report said.
“Vigorous public investment in infrastructure has been critical” in counteracting negative developments.
The report warned that for India “the anaemic performance of private investment remains a key macroeconomic concern.”
“Gross fixed capital formation as a share of GDP has declined from about 40 per cent in 2010 to less than 30 per cent in 2017,” the report said. — IANS
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