Indian economy may grow over 7%: UNESCAP

By agencies   |   Monday, 25 April 2005, 07:00 Hrs
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NEW DELHI:India's economy is likely to grow by more than seven percent over the next two years if there are no major internal or external shocks, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) said in its annual regional economic and social survey released here today.

Unfavorable weather conditions in 2004 slowed down India's 8.5 percent growth in 2003 to 6.9 percent last year, but this is projected to recover to 7.2 percent this year, according to the UNESCAP assessment.

''Assuming no major internal or external shocks and no political instability, India should be able to sustain real GDP growth rates in the range of 7-7.5 percent in 2005-2007,'' it says.

The robust Indian economic growth will be supported by projected growth rates of two to four percent in agricultural value added, 7.5 to 8 percent in industry and 8.5 percent in services in the next two years.

Noting the growing economic integration in South Asia, the UNESCAP report highlights the India-Bangladesh-Myanmar gas pipeline agreement as well as the Indian agreement to exempt all import duty from 78 items exported by Bangladesh, which comprise three-fourths of Bangladeshi exports.

''By creating a sub-regional market for exports, the agreements have enabled South Asian countries to benefit from long-term integration,'' says the report, adding that the ''external sector is therefore expected to become an increasingly important source of economic growth particularly for the least developed countries in the region''.

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