NEW DELHI: India's economy is projected to grow at 7.1 percent in fiscal year 2020 on the back of strong domestic consumption and investment but the GDP growth is a downward revision from the 7.4 percent estimated in January this year, according to a report by the United Nations.
The World Economic Situation and Prospects (WESP) 2019 Mid-year Update, released here Tuesday, said that the Indian economy, which generates two-thirds of the regional output in South Asia, expanded by 7.2 percent in 2018, report agencies."Strong domestic consumption and investment will continue to support growth, which is projected at 7.0 percent in 2019 and 7.1 percent in 2020," the report said.
The estimates for India, however, reflect a downward revision from the projections made in the World Economic Situation and Prospects 2019 report released in January this year. That report had estimated that India would grow at 7.6 percent in fiscal year 2019 and 7.4 percent in 2020. It must be noted that despite the downward revisions, India remains the fastest growing major economy in the world, ahead of China.
The WESP mid-year update noted that growth projections for 2019 have been revised downward in all major developed economies. The growth outlook for many developing economies has also weakened, it said, adding that despite downward revisions, growth in India remains "strong" amid robust domestic demand.
"The global growth outlook has weakened amid unresolved trade tensions and elevated international policy uncertainty. Across both developed and developing countries, growth projections for 2019 have been downgraded. Alongside a slow-down in international trade, business sentiments have deteriorated, casting a cloud on investment prospects,” the report said.
World gross product growth is now expected to moderate from 3.0 percent in 2018 to 2.7 percent in 2019 and 2.9 percent in 2020, reflecting a downward revision from WESP 2019 forecast released in January. In tandem with slowing industrial production, international trade activity has visibly weakened, reflecting in part unresolved trade disputes between the United States of America and China.
In the US, the growth momentum is projected to moderate as headwinds from trade policy are compounded by the waning effects of fiscal stimulus. Growth in China is projected to moderate gradually from 6.6 percent in 2018 to 6.3 percent in 2019 and 6.2 percent in 2020.