Amidst a string of varying growth numbers being projected by multilateral institutions, a report by the United Nations has estimated the Indian economy to grow by 6.1 per cent in 2013, marking a recovery from the decade-old slowest pace of 5.5 per cent in 2012.
The UN, in its report titled ‘World economic situation and prospects 2013’ (WESP), released here on Thursday, said: “GDP growth in India will accelerate to 6.1 per cent in 2013 and 6.5 per cent in 2014 as a result of stronger growth of exports and capital investment... Investment demand is expected to respond to a more accommodative monetary policy stance and slightly improved business confidence.”
The WESP noted that India’s economy, representing almost three quarters of the South Asian region’s GDP (gross domestic product), slowed markedly in the past years with annual growth declining from more than 9 per cent in 2010 to 5.5 per cent in 2012, the slowest pace in 10 years.
“The slowdown reflected weaker consumption and investment demand as a result of persistent inflation, high nominal interest rates, large fiscal deficits and political gridlock,” the report said and held that these factors “will likely continue to impact economic growth in the next two years even as a moderate recovery is expected.”
Releasing the report here, United Nation’s ESCAP (Economic and Social Commission for Asia and the Pacific) Chief Economist Nagesh Kumar, however, viewed that India had a huge growth potential in the long term. “India and China are playing a major role in the growth of world economy,” he said.
As for the South Asian region as a whole, the report pointed out that economic growth during 2012 also fell to its lowest pace in a decade.
“After growing by 5.8 per cent in 2011, South Asia’s gross domestic product expanded by only 4.4 per cent in 2012.
“Going forward, economic growth in the region is projected to accelerate to 5 per cent in 2013 and 5.7 per cent in 2014, led by a gradual recovery in India,” it said.