India to clock 7.1 per cent GDP this year, 7.5 per cent in 2018: UN report

As per ‘The Economic and Social Survey of Asia and the Pacific 2017’ released by UN Economic and Social Commission for Asia and the Pacific (ESCAP), Indian economy is expected to register 7.1% GDP growth in 2017 and 7.5% in 2018.

• The survey was launched by ESCAP Executive Secretary Shamshad Akhtar in Bangkok.

Growth Outlook for India:

The survey has forecasted 7.1% growth for Indian economy in 2017. The growth will come on the back of increased Government spending on infrastructure projects and remonetisation activity by Reserve Bank of India, which is expected to restore consumption patterns.

• For 2017-18 the inflation is expected to be in the range of 3-5.5%, which breaches the official target of 4.5-5.0%.
• Gross non performing asset (NPA) ratio in public sector banks, which reached 12% level in 2016, has been identified as biggest downside risk to growth of Indian economy. The survey has highlighted the need for ‘bank re-capitalisation’.
• The survey also noted that despite broader fiscal tightening, capital expenditure under Union Budget 2017-18 has been 25% higher as compared to previous year’s budget.

Growth Outlook for Asia-Pacific Region:

• Asia-Pacific region’s developing economies are expected to grow at 0% in 2017 as compared to 4.9% in 2016. For 2018, the forecasted growth rate is 5.1%.
• The survey has maintained an overall moderate growth outlook for Asia-Pacific economies. However it states that these economies are vulnerable to global uncertainties and protectionist policies adopted by certain nations in international trade. Any radical increase in these factors can reduce the regional growth in 2017 by 1.2%.
• Chinese economy is expected to grow at 5% in 2017 as compared to 6.7% in 2016. The survey has a stable outlook for Chinese economy in medium term with a room for restructuring and sectoral rotation.

Quick Facts about United Nations Economic and Social Commission for Asia and the Pacific (ESCAP):

It is one of the five regional commissions of the United Nations Economic and Social Council, established to enhance economic cooperation among member states.

• Formation year: 1947
• Headquarters: Bangkok, Thailand
• Parent Organisation: United Nations Economic and Social Commission
• Members: 53 countries
• Executive Secretary: Shamshad Akhtar of Pakistan