The United Nations (UN) has lowered India's gross domestic product (GDP) growth forecast for the financial year 2017. As per the UN World Economic Situation and Prospects as of mid- 2017 report, the Indian economy is expected to grow at 7.3 percent in 2017, a downward revision from the 7.7 percent forecast in January.
However, the revised report has projected India’s GDP in the next fiscal year to achieve an impressive growth of 7.9 percent, revising upwards its January estimates when it had said India’s growth will be 7.6 percent next year. It also warned that stressed balance sheets in the banking and corporate sectors, which have emerged as a cause of anxiety for the Narendra Modi government, will have an adverse effect on investment rebound in the country.
UN report pointed out that the country’s economic condition remains strong despite transitory disruptions from the government’s demonetization move. It also said that this is primarily due to sound fiscal and monetary policies along with the implementation of key domestic reforms. Adding further, it also said that despite India’s growth being revised downward, it remains the fastest growing large developing economy, way ahead of China which is projected to grow at 6.5 per cent in 2017 and 2018.