The United Nations Conference on Trade and Development (UNCTAD) on Thursday said that India was expected to grow at around 5.2 per cent during 2013-14 on the back of rising domestic demand, even as economists warned the world could face another economic crisis.
Releasing the UNCTAD Trade and Development Report 2013, eminent economist, Jayati Ghosh said the world may face another economic crisis as several nations, both developing and developed, still have imbalances.
According to the report, the Indian economy is expected grow at 5.2 per cent in calendar year 2013 as against 3.8 per cent in 2012. This forecast is lower than the IMF’s projection of 5.6 per cent growth for India for the year.
In case of China, the report said, the growth rate is expected to moderately decline to about 7.6 per cent in 2013 from 7.8 per cent last year. ``Growth in some large developing economies such as India, Brazil, Argentina and Turkey, which was subdued in 2012 is likely to accelerate in 2013,’’ it added.
Developing nations continue to be the main drivers of growth, contributing about two-thirds of global growth in 2013. In many of them, growth has been driven more by domestic demand than by exports, as external demand, particularly from developed countries has remained weak. Developing countries may grow at a rate of 4.5-5 per cent in 2013, similar to 2012, it added.
However, it has predicted that several other developing economies including South Africa seem unlikely to be able to maintain their previous year's growth rates. The combination of these factors may also affect China's growth rate, which is expected to slow down moderately from 7.8 per cent in 2012 to about 7.6 per cent in 2013, it said.
``We have same imbalances in many nations that we had in 2008. There are signs that there are imbalances which have to be resolved in a right way, otherwise another economic crisis is coming for sure. We can manage it for a while but it is going to come,’’ Ms. Ghosh said at the release of the report.
Asked about the forecast for the crisis, she said: ``I cannot predict the time but it could be six months, a year or three years. The whole strategy adopted by many developed countries is reflective of the fact that they are not willing to take their imports at the same rate at which they were earlier. The US trade deficit is shrinking. They are exporting more than importing. This will have huge implications for the rest of the world as America is a big economy,’’ she said.
Ms. Ghosh also predicted that more protectionist measures will take shape as it is a typical feature of slowdown. ``Protectionism is going to increase and global trade will decelerate. It is going to get harder and harder to penetrate into a particular market. Global trade, therefore, will decelerate,’’ she added.
