India retains top spot as fastest-growing major economy: UN

United Nations: With economic growth forecast at 6.4 percent for this fiscal year, India will be the fastest-growing major economy, according to a UN report.

“We expect Indian recovery to remain strong in the near term in the next year, and two,” Hamid Rashid, the chief of the UN’s Global Economic Monitoring Branch, said at the release of the World Economic Situation and Prospects (WESP) mid-year report.

India’s growth contrasts with the global growth rate that is forecast at 3.1 percent this year and the next, according to the report. Its GDP is expected to go down to 6 percent in the next fiscal year, according to the WESP.

Last fiscal year, India’s economy grew by 8.8 percent, slightly less than the January forecast of 9 percent, the report said.

Amid the global turbulence from the Ukraine conflict, the forecast for the current fiscal year has been reduced modestly by 0.3 percent since January.

China, which ranks as the second-fastest growing large economy, is forecast to grow by 4.5 percent this year and 5.2 percent next year.

Asked about India’s better economic performance and prospects relative to the other major economies, Rashid attributed it to the relatively lower inflation there which does not require monetary tightening to the same degree as many of the other countries.

“Almost all the regions in the world record high inflation except for East Asia and South Asia,” he said. “So India is in that sense, is in a little better position in that they don’t have to aggressively pursue monetary tightening” like some other countries, he said.

The UN’s projections for India are lower than those made by the International Monetary Fund and the World Bank last month before the full impact of the Ukraine war was beginning to be felt. The IMF had forecast a growth of 8.2 percent and the WB 8 percent.

Images courtesy of (Source: UN DESA) and (source: [email protected])

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