India’s growth to hold at 5.8% keeping top spot: UN

United Nations: The UN said that “with many positives”, India’s economic growth this year is expected to hold at 5.8 per cent, affirming a series of international organisations’ projections that the country will be the fastest-growing major economy.

The Midyear Update to the UN’s World Economic Situation and Prospects report projected next year’s gross domestic Product (GDP) to hold at 6.7 per cent “supported by resilient domestic demand”.

Speaking at the release of the report, the chief of the UN’s Global Economic Monitoring Branch, Hamid Rashid, said that India continues to be “the bright spot” in the world economy with “many positives, including [that] the inflation has come down significantly” to about 5.5 per cent.

“This means that there’ll be significant room for both fiscal expansion and monetary accommodation, so that will support domestic demand,” he said.

However, he said that there were external risks.

If the external financing conditioning deteriorates further and becomes much tighter, Rashid said, India would face some challenges, especially for exports.

As for India reaching even higher growth rates, he said it is “subject to quite a bit of uncertainty, especially in the external environment”.

But he added, “We are pretty confident with our forecast right now for the year.”

The report said that “financial conditions in the emerging economies with good credit ratings have generally remained relatively stable”.

The International Monetary Fund (IMF) had last month projected India’s GDP to grow at 5.9 per cent in the current fiscal while the World Bank (WB) pegged it at 6.3 percent and the Asian Development Bank at 6.4 per cent, which are closer to India’s Reserve Bank’s 6.5 per cent.

But both the bigger international institutions cut the projections marginally from the earlier one – IMF by 0.2 per cent and the WB by 0.3 per cent.

The latest UN report cut the overall growth projects by 0.1 per cent for all of South Asia to 4.7 per cent this year and 5.8 per cent next year.

Inflation for the region as a whole is projected by the UN to be 11 per cent, 1.9 per cent lower than last year, it said.

The inflation rates for Pakistan and Sri Lanka are expected to be in the “double digits” due to the weakening of local currencies.

But India’s inflation deceleration to 5.5 per cent would be the result as “global commodity prices moderate and slower currency appreciation reduces imported inflation”, it said.


Biden, Republicans hopeful of a deal to raise US debt ceiling

Washington: US President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But the Republican House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart, the BBC reported.

The standoff has forced Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4 trillion debt as soon as June 1.

A failure by the government to meet its debt obligations could trigger global financial chaos, the BBC reported.

The President said Tuesday’s hour-long Oval Office meeting was “good, productive”, sounding upbeat about the prospects of an agreement.

McCarthy said afterwards he believed a deal was possible by the end of this week.

Asked about the risk of the US falling off a fiscal cliff, the California Congressman told the BBC: “The great thing about that question is we’ve already taken default off the table.”

The House Speaker also told reporters a Biden-appointed representative would negotiate directly with his staff, which he said was a sign that “the structure of how we negotiate has improved.

Image courtesy of File photo

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