The United Nations (UN) has lowered its forecast for India’s GDP growth in 2019-20 to 7.1% from its estimate in January of 7.5%, citing an overall slowdown in global growth.
The UN World Economic Situation and Prospects as of mid-2019 report said that the global economy is experiencing a broad-based growth slowdown led by slowing industrial production coupled with the weakening of international trade activity due in large part to the unresolved trade disputes between the U.S. and China.
“Across both developed and developing countries, growth projections for 2019 have been downgraded,” the report said. “Alongside a slowdown in international trade, business sentiments have deteriorated, casting a cloud on investment prospects. “The Indian economy, which generates two-thirds of the regional output, expanded by 7.2% in 2018,” the report added. “Strong domestic consumption and investment will continue to support growth, which is projected at 7% in 2019 and 7.1% in 2020.”
While the slowdown in European Union has meant exports from nations such as Bangladesh have also slowed as the EU is one of its major export destinations, India is on a stronger footing because of the nature of its export destinations.
“India’s exports remain more robust, as around half of exports are destined for faster-growing Asian markets,” the report said.
Overall, the UN lowered its growth forecast for South Asia marginally to 5.8% in 2020 from the 5.9% estimated for the year in January.
