UNWESP Current Affairs
According to UN World Economic Situation and Prospects (WESP), India’s economy is projected to grow 7.6% in fiscal year 2018-19, making it fastest growing economy in the world. GDP growth in India is expected 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively.
Key Highlights of report
World economy: It is projected to reach 3.2% both in 2018 and 2019, an upward revision by 0.2 and 0.1%, respectively. Global GDP is expected to expand, reflecting strong growth in developed countries and broadly favourable investment conditions. However rising trade tensions, heightened uncertainty over monetary policy, increasing debt levels and greater geopolitical tensions can potentially thwart growth progress.
World trade growth: It also has accelerated, reflecting widespread increase in global demand. Many commodity-exporting countries will also benefit from the higher level of energy and metal prices. The modest rise in global commodity prices will exert some upward pressure on inflation in many countries. But the inflationary pressures remain contained across most developed and developing regions.
India: GDP growth is expected 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively. This is a substantial recovery from 6.7% growth India registered in fiscal year 2017. Growth in India is gaining momentum, underpinned by robust private consumption, slightly more supportive fiscal stance and benefits from past reforms. Though capital spending in India has shown signs of revival, more widespread and sustained recovery in private investment remains crucial challenge in India.
China: It is projected to gradually moderate from 6.9% in 2017 to 6.5% in 2018 and 6.3% in 2019. Its growth is expected to remain solid, supported by robust consumer spending and supportive fiscal policies followed by ongoing structural reforms.
South Asia: GDP growth in region is expected to strengthen to 6.6% in 2018 and 6.8% in 2019, following an expansion of 6% in 2017. It remains favourable, amid robust domestic demand, strong infrastructure investment and moderately accommodative monetary policies. Moreover, regional inflation is anticipated to remain stable and at relatively low levels.
UN World Economic Situation and Prospects (WESP)
The report is joint product of UN Department of Economic and Social Affairs (UN/DESA), UN Conference on Trade and Development (UNCTAD) and five United Nations regional commissions.
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.