 "India to clock growth of 7.3% in 2016, says UN report")
India is expected to be the fastest growing large economy in 2016-17, the World Economic Prospects 2016 Report by United Nations, launched on Friday, has pointed out.
India's average gross domestic product (GDP) growth has been estimated to grow by 7.3 per cent in 2016 and 7.5 per cent in 2017, up from 7.2 per cent in 2015. The calculations, made on a calendar year basis but extrapolated for the financial year, shows China will be increasing its GDP by 6.9 per cent and 6.5 per cent for the next two years.
In comparison, GDP growth in South Asia — the geopolitical area covering the countries of India, Bangladesh, Pakistan, Nepal, Bhutan, Sri Lanka, Maldives and Afghanistan — is expected grow by 6.7 per cent in 2016 and seven per cent in 2017. India's economy accounts for over 70 per cent of the GDP in South Asia.
The report is an annual joint product of the United Nations Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five regional commissions of the world body. It estimates global growth will be slightly higher at 2.9 per cent in 2016 and 3.2 per cent in 2017.
Last year's report had forecast global growth to be around 2.8 per cent, which has been significantly reduced to 2.4 per cent in 2015. “India is an exception in the global scene with improved macroeconomic foundations and economic reforms,” said Nagesh Kumar, head of United Nations Economic and Social Commision for Asia and the Pacific (ESCAP)'s south and southwest Asia office.
Saying the Indian economy has shown a lot of resilience in maintaining growth during a time of ebbing global demand, falling commodity prices and weakening growth in emerging economies, Kumar also pointed out a stimulating fiscal policy was the need of the hour. He said fiscal consolidation should not hold back much needed capital spending at this point in time.
The lack of suitable infrastructure, including energy and transport, delay in big ticket economic reforms like Goods and Services Tax and a wide gender gap in employment, have been noted as other major challenges to the economy in unlocking growth.
A report by international management consultants McKinsey suggests plugging the gender gap could add Rs 46 lakh crore ($700 billion) to India's GDP by 2025.
Falling crude prices, expected to slide further after Iran boosts daily export volumes of oil by 500,000 barrels, have also found mention in the report as an important driver behind the country’s falling import figures and a balancing current account deficit. However, Kumar said 20 per cent of India's exports are in the category of refined petroleum products which have also suffered from falling crude rates.
For South Asia, sustained rise in domestic consumer demand, boosted by low commodity prices, moderate inflation and a slight uptick in exports, are expected to be the major drivers behind growth. Domestic factors in certain countries like adoption of the new constitution in Nepal and rebuilding efforts in Afghanistan are also expected to provide significant boost in this regard.
Warning that China’s sharper-than expected slowdown might spill over to the region in some manner, the report suggests the slowing pace of monetary policy reform may also spoil growth forecasts.
Among major economies, while Russia is expected to see GDP growth shrinking in the next two years by 3.9 per cent and 0.5 per cent, Japan will have the lowest GDP increase in Asia-Pacific at 0.5 per cent and 1.1 per cent.
India's average gross domestic product (GDP) growth has been estimated to grow by 7.3 per cent in 2016 and 7.5 per cent in 2017, up from 7.2 per cent in 2015. The calculations, made on a calendar year basis but extrapolated for the financial year, shows China will be increasing its GDP by 6.9 per cent and 6.5 per cent for the next two years.
In comparison, GDP growth in South Asia — the geopolitical area covering the countries of India, Bangladesh, Pakistan, Nepal, Bhutan, Sri Lanka, Maldives and Afghanistan — is expected grow by 6.7 per cent in 2016 and seven per cent in 2017. India's economy accounts for over 70 per cent of the GDP in South Asia.
The report is an annual joint product of the United Nations Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five regional commissions of the world body. It estimates global growth will be slightly higher at 2.9 per cent in 2016 and 3.2 per cent in 2017.
Last year's report had forecast global growth to be around 2.8 per cent, which has been significantly reduced to 2.4 per cent in 2015. “India is an exception in the global scene with improved macroeconomic foundations and economic reforms,” said Nagesh Kumar, head of United Nations Economic and Social Commision for Asia and the Pacific (ESCAP)'s south and southwest Asia office.
Saying the Indian economy has shown a lot of resilience in maintaining growth during a time of ebbing global demand, falling commodity prices and weakening growth in emerging economies, Kumar also pointed out a stimulating fiscal policy was the need of the hour. He said fiscal consolidation should not hold back much needed capital spending at this point in time.
The lack of suitable infrastructure, including energy and transport, delay in big ticket economic reforms like Goods and Services Tax and a wide gender gap in employment, have been noted as other major challenges to the economy in unlocking growth.
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A report by international management consultants McKinsey suggests plugging the gender gap could add Rs 46 lakh crore ($700 billion) to India's GDP by 2025.
Falling crude prices, expected to slide further after Iran boosts daily export volumes of oil by 500,000 barrels, have also found mention in the report as an important driver behind the country’s falling import figures and a balancing current account deficit. However, Kumar said 20 per cent of India's exports are in the category of refined petroleum products which have also suffered from falling crude rates.
For South Asia, sustained rise in domestic consumer demand, boosted by low commodity prices, moderate inflation and a slight uptick in exports, are expected to be the major drivers behind growth. Domestic factors in certain countries like adoption of the new constitution in Nepal and rebuilding efforts in Afghanistan are also expected to provide significant boost in this regard.
Warning that China’s sharper-than expected slowdown might spill over to the region in some manner, the report suggests the slowing pace of monetary policy reform may also spoil growth forecasts.
Among major economies, while Russia is expected to see GDP growth shrinking in the next two years by 3.9 per cent and 0.5 per cent, Japan will have the lowest GDP increase in Asia-Pacific at 0.5 per cent and 1.1 per cent.