India is set to remain the world’s fastest-growing major economy, as the United Nations (UN) projected a growth rate of 6.4 percent this year despite global uncertainty caused by the Iran conflict. UN senior economist Ingo Pitterle, briefing reporters on the mid-year update to the World Economic Situation and Prospects report yesterday, said that India’s strong consumer demand, public investment, and growth in services exports continue to support its economy. Although the report slightly lowered India’s GDP forecast from 6.6 percent to 6.4 percent, but it expects growth to rebound next year.
Director of UN’s Economic Analysis and Policy Division Shantanu Mukherjee highlighted India’s diversified economy, structural reforms, and improved tax revenues as key strengths. The UN report also noted that India’s diversified energy sources, strong refining capacity, large foreign exchange reserves, and fiscal flexibility could help cushion the impact of rising oil prices caused by tensions in the Middle East and disruptions in the Strait of Hormuz.
After India, the next fastest-growing major economy is China, clocking a growth rate of 4.6 percent this year before dipping to 4.5 percent next year. The report also lowered the world growth rate to 2.5 percent, down by 0.2 percentage points from the projection made in January before the Iran war.
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