India's economic growth is expected to remain robust in 2012 and 2013, despite likely headwind of double-dip recessions in Europe and the US. This has been highlighted in the World Economic Situation and Prospects 2012, the United Nations' annual economic report released today.
Indian economy is expected to grow by between 7.7 per cent and 7.9 per cent this year, the report said. South Asia's economies are expected to grow by 6.7 per cent this year and 6.9 per cent next year, accelerating slightly from 6.5 per cent last year.
Robust domestic demand will sustain this increase (in South Asia), but the economic slowdown in India, where growth declined from 9 per cent in 2010 to about 7.6 per cent last year, brings down the regional average, the report said. South Asia comprises India, Pakistan, Nepal, Iran, Bangladesh and Sri Lanka.
On Inflation
Among the major developing countries, growth in India and China is expected to remain robust. Brazil and México are expected to suffer a more visible economic slowdown.
The UN report expects inflation in most developing countries to decelerate this year, along with an anticipated moderation in global commodity prices and lower global growth.
Fiscal deficit
On fiscal deficit, the report said that the Indian Government is unlikely to achieve its fiscal deficit target of 4.7 per cent of the gross domestic product for 2011-12 as lower growth has brought down tax revenues and disinvestment in state-owned entities has been put on hold.
On the global economic prospects for 2012 and 2013, the report noted that the world economy is on the brink of another major downturn and anaemic growth is expected during 2012 and 2013.