In the midst of an anticipated global slowdown to 3 per cent in 2011, the United Nations Conference on Trade and Development (UNCTAD) has highlighted India as a shining star, projecting an economic growth of 8.1 per cent — the fastest rate of expansion in the world after China.
In its ‘Trade and Development Report 2011' released here on Tuesday by economist and JNU professor Jayati Ghosh, UNCTAD stated that despite the slowdown in developed countries, the Indian economy is set to grow by 8.1 per cent in 2011 as against to 8.6 per cent in 2010. Surpassing India during the year would be the East Asian giant China with a growth rate of 9.4 per, slightly lower than the 10.3 per cent posted in 2010.
“In South Asia, India continues to pursue rapid economic growth (close to 8 per cent), based mainly on strong domestic consumption and investment, but also on the positive contribution of net exports,” The TDR 2011 said. Interestingly, UNCTAD's growth projection for India during the calendar year is only marginally lower than the International Monetary Fund's estimated of 8.2 per cent and slightly above the 8 per cent level forecast by the Reserve Bank of India (RBI) for the current fiscal year. The various estimates are also in line with the World Bank's projection of 8 per cent 2011-12 and the Asian Development Bank's 8.2 per cent for the fiscal. While global economic growth in 2011, the report said, is likely to slow down to 3.1 per from almost 4 per cent in 2010, developing economies are also likely to be affected by recession in the developed world. However, even as the developing countries are expected to regain the pre-crisis growth rate of 6 per cent in 2011, economic expansion in the developed economies is likely to be only about 1.5-2 per cent, it said. The South Asia region, UNCTAD said, is likely to be among the best performers globally, with a growth of seven per cent in 2011. On the other hand, growth in the U.S. is likely to remain low on account of low domestic demand, stagnating wages. while the European debt crisis is also expected to act as a drag on the global growth. As for India, UNCTAD noted that its growth story is mainly on account of domestic demand.
