Indian economy poised to grow 7.3 % in 2016:. United nations

India’s economy is “slowly gaining momentum” and is projected to grow by 7.3 per cent this year, acoording to a report released by United nation.
Highlights:

• This report titled "World Economic Situation and Prospect report" is produced jointly by the U.N. Department of Economic and Social Affairs (UNDESA) and the U.N. Conference on Trade and Development (UNCTAD).
• China, which grew at about 6.9 per cent in 2015, will continue to witness slowdown in growth, with its GDP projected to grow 6.4 per cent in 2016 and 6.5 per cent in 2017.
• According to this report India will achieve 7.5 per cent GDP growth in 2017.
• The growth estimates for India in the mid-year update are in line with projections made in January this year, when the 2016 World Economic Situation and Prospect report had said that India will be the world’s fastest growing large economy at 7.3 per cent in 2016, improving further to 7.5 per cent in the following year.
• India’s economy, which accounts for over 70 per cent of South Asia’s GDP, had grown by about 7.2 per cent in 2015.
• In the US, GDP growth is expected to reach just 2.2 per cent in 2016.
• GDP growth in Japan has exhibited significant volatility in recent quarters, and the economy remains plagued by weak household consumption.
• Global GDP growth is forecast to average 0.5 per cent in both this and next year.
• As a whole, economic growth in developing nations in 2016 is unlikely to exceed the 3.8 per cent growth seen in 2015.
• The revised forecast reflects significant downward adjustments in the growth rates of many countries in Africa, the Commonwealth of Independent States (CIS), and Latin America and the Caribbean

Analysis:

• Despite some delays in domestic policy reforms and enduring fragilities in the banking system, investment demand is supported by the monetary easing cycle, rising FDI, and government efforts towards infrastructure investments and public-private partnerships
• A larger-than-expected slowdown in China would have widespread spill-over effects through trade, financial and commodity markets, while a further deterioration of commodity prices could trigger debt crises in certain commodity-dependent economies.
• Despite the protracted instabilities and general weakness of the global economy, South Asia’s economic outlook remains favourable, with most countries benefiting from low oil prices.
• This growth is owing to robust private consumption, strengthening investment demand and gradual progress on domestic policy reforms.
• Inflation in the South Asian region is projected to remain relatively tame, reflecting subdued commodity prices and lower pressures from supply-side bottlenecks.

By: Vishal