India’s GDP is projected to “remain robust” at 5.8%, says UN report

United Nations:

The United Nations said on Wednesday that India’s GDP is projected to moderate to 5.8 per cent in 2023 as high interest rates and global economic slowdown are impacting investments and exports. Other South Asian nations “are more challenging”.

The World Economic Situation and Prospects 2023 report states that world output growth is projected to decline from an estimated three per cent in 2022 to 1.9 per cent in 2023, marking one of the lowest growth rates in recent decades in a “severe and reciprocal manner”. Marks it as “series from”. Strong shocks – the COVID-19 pandemic, the war in Ukraine and the resulting food and energy crisis, rising inflation, the debt crunch, as well as the climate emergency – battered the world economy in 2022.

In South Asia, the economic outlook has deteriorated significantly due to high food and energy prices, monetary tightening and fiscal weaknesses, said the report prepared by the United Nations Department of Economic and Social Affairs (UNDESA). Average GDP growth is projected to slow down from 5.6 percent in 2022 to 4.8 percent in 2023.

“Growth in India is expected to remain strong at 5.8 per cent, although slightly lower than the projected 6.4 per cent in 2022, as higher interest rates and a global slowdown weigh on investment and exports,” the report said.

The UN report said “outlooks are more challenging” for other economies in the South Asia region. Bangladesh, Pakistan and Sri Lanka sought financial assistance from the International Monetary Fund (IMF) in 2022.

While economic growth in India is projected to moderate to 5.8 percent in calendar year 2023, with exports weakening due to higher interest rates on investment and slower global growth, the report estimates the country will grow at 6.7 percent in 2024. The fastest – the world’s leading economy.

The report presents a gloomy and uncertain global economic outlook for the near term. Global growth is projected to recover modestly to 2.7 percent in 2024 as some headwinds begin to subside.

However, this is highly dependent on the pace and sequence of monetary tightening, the course and outcomes of the war in Ukraine, and the likelihood of further supply-chain disruptions.

UN Secretary-General Antonio Guterres said, “This is not the time for short-term thinking or knee-jerk fiscal austerity that widens inequality, exacerbates suffering and could put the SDGs out of reach. These unprecedented times demand unprecedented action.” Is.”

“This action includes a transformative SDG stimulus package, which has resulted from the collective and concerted efforts of all stakeholders,” he added.

China is projected to grow at 4.8 per cent in calendar year 2023 and 4.5 per cent in 2024, while the US is projected to register economic growth of 0.4 per cent this year and 1.7 per cent in 2024.

The direction of trade in Russia has changed markedly since the war began, with the report saying that although Russian oil has been redirected to Asia and sold at a discount price, the total value of exports to China in 2022, increased as trade with India and Turkey increased.

Russia’s current account surplus for the first three quarters of 2022 totaled US$198 billion versus US$122 billion for 2021.

The report noted that amid high inflation, aggressive monetary tightening and heightened uncertainties, the current recession has slowed the pace of economic recovery from the COVID-19 crisis, giving many developed and developing countries the prospect of a recession in 2023. There is danger.

Growth momentum in the United States, the European Union and other advanced economies weakened significantly in 2022, adversely affecting the rest of the global economy through multiple channels.

In India, annual inflation is projected at 7.1 percent in 2022, which is higher than the 2 to 6 percent medium-term inflation target band set by the Central Bank. India’s inflation is expected to ease to 5.5 per cent in 2023 as softening global commodity prices and slower currency depreciation weigh down imported inflation.

Most developing countries see a slow job recovery in 2022 and continue to face substantial employment losses. The report noted that losses in women’s employment during the early phase of the pandemic have not been fully reversed, mainly due to recovery in informal jobs.

Labor market improvements have been uneven across the region. Among major economies, the unemployment rate in India fell to a four-year low of 6.4 per cent as the economy added jobs in both urban and rural areas in 2022, the report said.

“In India, the unemployment rate in 2022 is expected to fall to pre-pandemic levels through an increase in urban and rural employment to cluster,” it said.

The report calls on governments to avoid fiscal austerity, which will stifle growth and disproportionately affect the most vulnerable groups, stifle progress in gender equality and stifle growth prospects across generations. It recommends reallocation and re-prioritisation of public expenditure through direct policy interventions that will create jobs and revive growth. This will require strengthening social protection systems, ensuring continued support through targeted and temporary subsidies, cash transfers and rebates on utility bills, which can be complemented with cuts in consumption taxes or customs duties.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)