Economic Growth Current Affairs
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According to BMI Research, a Fitch group company, India is expected to register a growth of 6.9% in this financial year.
BMI Research was founded in 1984 by Business Monitor International and later in 2014, it was acquired by Fitch Group. The firm performs industry and financial market analysis in 24 industries and 200 global markets.
The report has observed that the Real GDP growth has slowed to 6.1 % year-on-year in the fourth quarter of 2016-17. The growth rate is expected to pick up following the demonetisation drive in November 2016 but the weak public banks are expected to cap the economic recovery. The Public-Sector Banks are still plagued with mounting non-performing assets, which is expected to take a toll on India’s growth potential. Though the RBI has taken efforts to clean up the NPAs, the study observes that it will take some more time for credit allocation to the productive sectors of the economy.
The report, however, expects the economy to continue to recover in the coming quarters as the negative ramifications of the demonetisation measure have already started wearing off. India is also expected to get benefits from positive demographic trends, greater external stability arising out of improved terms of trade from low oil prices, and continued reforms improving the business environment of the country.
The report expects a slowdown in economic growth in North Asia in 2017 and 2018. The slowdown will be driven by the structural slowdown in China, poor policy initiatives in Japan, and policy uncertainty in South Korea.
In Asia, India and ASEAN are likely to remain as the bright spots in the region owing to their positive demographics and improvements in the business environments.
According to the research conducted by the Centre for International Development at Harvard University (CID), India will be the base to the economic pole of global growth over the coming decade. The study has stated that over the years, the economic pole of global growth has moved from China to neighbouring India and it is likely to remain over India in the coming decade.
The study has attributed India’s rapid growth prospects to the diversification of the country’s export base which now includes more complex sectors such as chemicals, vehicles and certain electronics. The study further states that India is also particularly well-positioned to continue diversifying into new areas
The research study has warned of a continued slowdown in global growth over the coming decade. With 7.7% annual growth, India and Uganda top the list of the fastest growing economies.
The growth projections indicate that the growth in emerging markets to continue to outpace that of advanced economies, though not uniformly. The study is also optimistic about new growth hubs in East Africa and new segments of South-East Asia, led by Indonesia and Vietnam.
The major oil economies of the world are experiencing the pitfalls of their reliance on one resource. On the other hand, India, Indonesia, and Vietnam have accumulated new capabilities that permit more diverse and complex production will have faster growth in the coming years.
The study has found a decline in China’s exports. Its economic complexity ranking has also declined four spots for the first time since the global financial crisis. However, the growth projections for China is still above the world average. China is expected to grow at 4.4% annually in the coming decade.
CID is Harvard University’s leading research hub that works to advance the understanding of development challenges and offer viable solutions to problems of global poverty.
The growth projections arrived by CID at the study are based on each country’s economic complexity, which tells about the diversity and sophistication of the productive capabilities embedded in a country’s exports and the ease with which that country could further diversify its exports by expanding those capabilities.