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India to be the fastest growing economy in the world in 2016 and 2017: UN

11 Dec 2015 Evaluate

United Nations (UN) in its latest report World Economic Situation and Prospects (WESP) 2016 has projected India to record a 7.3 percent economic growth in 2016 and 7.5 percent in 2017, and said that India will continue to be the fastest growing economy in the world in 2016 and 2017 amid a volatile global financial conditions that will see diminished trade flows and stagnant investment.

Though, the Indian economic growth is only a marginal improvement from the 7.2 percent it achieved in 2014-15, but still it remains the fastest growing economy in the world in 2016 and 2017. China will see a slowdown in growth in 2016 to 6.4 percent from 6.8 percent it had achieved in 2015. The report further said that the growth of the Chinese economy will not improve in 2017, when it will grow by just 6.5 percent, a percentage point slower than India.

Regarding the world economy, the report has said that it has fallen below forecasts of even six months ago and will grow only modestly over the next two years due to “cyclical and structural headwinds,” including low commodity prices and stagnant investment. Global growth is estimated at a mere 2.4 per cent in 2015, a downward 0.4 percentage-point revision from forecasts presented six months ago. The global economy is projected to grow by 2.9 per cent in 2016 and 3.2 per cent in 2017, supported by generally less restrictive fiscal and still accommodative monetary policy stances worldwide.

The report which is a joint product of the United Nations Department of Economic and Social Affairs (UN/DESA), the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions, had said that major weakness in the macroeconomic picture remains the employment situation. While, in the developed economies, unemployment figures remain elevated in several countries, especially in the euro area, in developing economies, despite slower employment growth, unemployment rates have remained relatively stable since 2013, partly owing to lower labour force growth. In its latest report it added that economic growth in developing and transition economies is expected to bottom out and gradually recover, but the external environment will continue to be challenging and growth will remain well below its potential.

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