India likely to improve economic growth to 6.3% in 2016: UN

The report launched by the UN also said that India is likely to make progress in implementing economic policy reforms

India's economic growth is expected to improve to 6.3% in 2016 with the country leading economic recovery in South Asia, according to a United Nations report.

The UN World Economic Situation and Prospects 2015 (WESP) report, launched here yesterday, also said India is likely to make progress in implementing economic policy reforms and help provide support to business and consumer confidence.

It said global economic growth is forecast to continue increasing over the next two years, despite legacies from the financial crisis continuing to weigh on growth, and the emergence of new challenges, including geopolitical conflicts such as in Ukraine, and the Ebola outbreak in West Africa.

The global economy is expected to grow 3.1% in 2015 and 3.3% in 2016, compared with an estimated growth of 2.6% for 2014, when the pace of expansion has been moderate and uneven.

It said India, which is estimated to record a 5.4% economic growth in 2014, will see GDP growth improving to 5.9% next year and 6.3% in 2016.

Economic growth in South Asia is also set to gradually pick up from an estimated 4.9% in 2014 to 5.4% in 2015 and 5.7% in 2016.

"While the recovery will be led by India, which accounts for about 70% of regional output, other economies such as Bangladesh and Iran are also projected to see stronger growth in the forecast period," the report said.

The about 6% growth projected for India in 2016 will be the highest since the 2008-2011 period when it had grown at about 7.3%.

Economic growth had slowed to 4.7% in 2012, according to the UN report.

During 2014, East Asia, including China, managed to register relatively robust growth, while India led South Asia to a moderate strengthening.

Developing countries as a group are expected to grow at 4.8% in 2015 and 5.1% in 2016, up from the 4.3% estimated for 2014.

The report added that along with robust external demand, growth is expected to be underpinned by a moderate strengthening of domestic consumption and investment as countries benefit from improved macroeconomic conditions.

"Several countries, notably India, are likely to make progress in implementing economic policy reforms, thus providing support to business and consumer confidence," it said.