UN forecasts Indian economic growth at 7.3% in 2016

13 May '16

4 min read

It said that regional prospects for South Asia are “contingent on robust growth” in India and the recovery of Iran, where after several years of economic difficulties, the outlook is improving, as the lifting of international sanctions encourages the revival of the oil sector and facilitates trade and financial flows.

It said financial and commodity markets have largely stabilised and recovered from the losses suffered at the start of the year, and capital flows to developing countries have also seen some revival, notably to Brazil, India, the Philippines and Taiwan.

Global economic activity overall remains lacklustre, with little prospect for a turnaround in 2016, the report said adding that world gross product is expected to expand by just 2.4 per cent in 2016, the same rate as in 2015.

This marks a significant downward revision of 0.5 percentage points to forecasts reported in December, 2015.

Global economic growth prospects for 2017 also remain well below pre-crisis trends, and a protracted period of slow productivity growth and feeble investment weigh on the longer-term potential of the global economy.

The revised forecast reflects significant downward adjustments in the growth rates of many countries in Africa, the Commonwealth of Independent States (CIS), and Latin America and the Caribbean, where tighter policy stances have exacerbated the effects of a series of adverse shocks.

As a whole, economic growth in developing nations in 2016 is unlikely to exceed the 3.8 per cent growth seen in 2015.

The momentum of growth slowed significantly in some large developed economies towards the end of 2015.

In the US, GDP growth is expected to reach just 2.2 per cent in 2016. GDP growth in Japan has exhibited significant volatility in recent quarters, and the economy remains plagued by weak household consumption.

Global GDP growth is forecast to average 0.5 per cent in both 2016 and 2017. (SH)

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