Despite delays in domestic policy reforms, United Nations in its report named World Economic Situation and Prospect has said that the India's economy is slowly gaining momentum and is projected to grow by 7.3 percent this year. The report said that despite some delays in reforms and enduring fragilities in the banking system the investment demand is supported by the monetary easing cycle, rising FDI, and government efforts towards infrastructure investments and public-private partnerships.
The growth estimates for India in the mid-year update are in line with projections made in January this year, when the 2016 World Economic Situation and Prospect report had said that India will be the world’s fastest growing large economy at 7.3 per cent in 2016, improving further to 7.5 per cent in the following year.
Furthermore, the report highlighted that the economic prospects of the South Asian region will be 'contingent' on the growth trajectory of India and Iran. It added that despite the protracted instabilities and general weakness of the global economy, South Asia's economic outlook remains favourable, with most countries benefiting from low oil prices. Inflation in the South Asian region is projected to remain relatively tame, reflecting subdued commodity prices and lower pressures from supply-side bottlenecks. India's economy, which accounts for over 70 per cent of South Asia's GDP, had grown by about 7.2 per cent in 2015.