India's growth rate is projected to accelerate to 7.2 per cent in 2018 and 7.4 per cent in 2019, the UN said, describing the outlook for the country as "largely positive."
Despite the slowdown observed in early 2017 and the lingering effects from the demonetization policy, the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms," the United Nations said.
In its report 'World Economic Situation Prospects,' released at the UN headquarters in New York, the UN said: "GDP growth for India is projected to accelerate from 6.7 per cent in 2017 to 7.2 per cent in 2018 and 7.4 per cent in 2019". At the same time, the report said, the performance of private investment remains a key macroeconomic concern.
"Gross fixed capital formation as a share of GDP has declined from about 40 per cent in 2010 to less than 30 per cent in 2017, amid subdued credit growth, low capacity utilisation in some industrial sectors and balance sheet problems in the banking and corporate sectors. In this environment, vigorous public investment in infrastructure has been critical in propping up overall investment growth," it said. According to the report, there exists some degree of uncertainty over the monetary policy stance in India. "Subdued inflation, coupled with a good monsoon season, offers scope for additional monetary easing," it said.
Fiscal deficit in India has declined visibly, and it is expected to narrow further to 3.2 per cent of GDP in 2018, it added. An upturn in the global economynow growing by about 3 per centpaves the way to reorient policy towards longer-term issues such as addressing climate change, tackling existing inequalities and removing institutional obstacles to development, according to the United Nations World Economic Situation and Prospects (WESP) 2018.
"The World Economic Situation and Prospects 2018 demonstrates that current macroeconomic conditions offer policy-makers greater scope to address some of the deep-rooted issues that continue to hamper progress towards the Sustainable Development Goals," said UN Secretary-General Antonio Guterres in the foreword of the report.