India's Growth Rate Expected To Almost Touch 8 Pct Next Year: UN
UNITED NATIONS: Rising up from the stumbles of demonetisation, India's economic growth next year is expected to almost touch the 8 pct mark by rebounding to 7.9 pct fueled by sound monetary policies and a boost from reforms, the UN said in a report released Tuesday.
The mid-2017 update to the UN World Economic Situation and Prospects report raised the figure by 0.3 pct from 7.6 pct projected at the beginning of this year.
"Despite temporary disruptions from the demonetization policy, economic conditions in India remain robust, underpinned by sound fiscal and monetary policies and the implementation of key domestic reforms," the report said.
However, for the current year, the report by the UN Department of Economic and Social Affairs (UNDESA) cut the growth rate by 0.4 pct to only 7.3 pct, down from the 7.7 pct it estimated in January.
Explaining the revision, Dawn Holland, the Senior Economic Affairs Officer, said: "The slower growth this year and the faster growth next year are more a shift in the timing of expenditure, which is largely related to the demonetisation."
It "did have an impact slowing domestic demand in the short term but we don't see this having a longer term impact. It is a transitory effect on the economy, which still remains one of the fastest growing countries in the world," she told reporters.
"We really see (that) the dynamics of India have shifted very much," she said.
Last year's growth rate was 7 pct, the report said.
India is expected to keep its lead as the world's fastest growing major economy in a world struggling to reach a 2.9 growth next year with the developed economies stuck at 1.8 pct.
UNDESA, however, also warned that the "stressed balance sheets in the banking and corporate sectors will prevent a strong investment rebound in the near term" in India.
Next year's 7.9 pct growth estimate for India is higher than the recent projections by other recent reports. Last month the International Monetary Fund fund estimated the growth rate to be 7.7 pct during 2018-9.
The UN Economic and Social Council for Asia and the Pacific (ESCAP) 2017 survey last month said it expected India's economy to grow by 7.5 pct next year.
For the current fiscal year, IMF's growth projection for India is 7.2 pct. ESCAP pegged this year's growth at 7.1 pct.
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