According to the United Nations World Economic Situation and Prospects (WESP) 2017 report, India’s economy is projected to grow by 7.7% in fiscal 2017 and 7.6% in 2018
India will remain the fastest growing large developing economy due to its strong private consumption and gradual introduction of significant domestic reforms.
The UN flagship report has not mention of the withdrawal of the high-denomination Rs. 500 and Rs. 1,000 currency notes nor its impact on the country’s economic growth.
Key Highlights from Report
- India has positioned itself as the most dynamic emerging economy among the largest countries and is expected to remain the fastest growing.
- However, incase of India, low capacity utilisation and stressed balance sheets of banks and businesses will prevent a strong investment revival in the short term.
- China’s growth is projected to remain stable at 6.5% for fiscal years 2017 and 2018 due to domestic demand and accommodative fiscal measures, including off-budget fiscal support through policy banks and public-private partnerships.
- Implications of China’s ongoing economic rebalancing will inevitably be felt by the region in medium and long-run through trade (including commodity prices) and financial channels.
Earlier, International Monetary Fund (IMF) had cut India’s growth rate for FY2017 to 6.6% from its previous estimate of 7.6% due to the “temporary negative consumption shock” of demonetisation. The World Bank also too decelerated India’s GDP growth for 2016-17 fiscal to 7% from its previous estimate of 7.6% citing the impact of demonetisation.