India is projected to grow at 5.9% in 2015: United Nations

Global economy to improve marginally, but mounting uncertainties and risks could undermine economic growth, upcoming US interest rate increases, remaining euro are fragility, a further slowdown in developing economies and geopolitical conflicts pose major concerns for global economic outlook.

According to United Nation’s report, World Economic Situation and Prospects 2015 (WESP), India is expected to grow at 5.9% in 2015 and 6.3% in 2016, compared with an estimated growth of 5.4% for 2014. The report said that India led the South Asian region to a moderate strengthening in growth during 2014 and it is expected that even in future the recovery will be led by India, which accounts for about 70% of regional output, other economies such as Bangladeshand the Islamic Republic of Iran are also projected to see stronger growth in the forecast period.

At the same time, several countries, notably India, are likely to make progress in implementing economic policy reforms, thus providing support to business and consumer confidence. There are, however, significant downside risks for the region due to the continuing fragility of the global economy and considerable country-specific weaknesses, including political instability and the agricultural dependency on the monsoon.

Among the developing countries, economic growth in South Asia is set to rise to 5.4% in 2015 and 5.7% in 2016, withIndia leading the growth in the region. Economic growth in Latin America and the Caribbean is projected to moderately improve. Meanwhile, Africa’s overall growth momentum will continue, with GDP growth expected to accelerate to 4.6% in 2015 and 4.9% in 2016. East Asia will remain the fastest-growing region, and is projected to see stable growth of 6.1% in 2015 and 6% in 2016. In the CIS, prospects are weak with near-zero growth expected in the Russian Federation.

Among the developed economies, the US economy is expected to improve to 2.8% in 2015 and 3.1% in 2016. Only a slight improvement in growth is expected in European Union which is projected to grow at 1.7% in 2015 and 2% in 2016. The region is held back by the travails of the euro area, where the level of GDP has yet to regain its pre-recession peak. In Japan, growth is estimated at 1.2% in 2015 and will decline to 1.1% in 2016; this is mainly attributed to the drop of private consumption due to a higher consumption tax.

In addition, the global economy is expected to grow at 3.1% in 2015 and 3.3% in 2016, compared with an estimated growth of 2.6% for 2014. Although legacies from the global financial crisis continue to weigh on growth, while new challenges have emerged, including geopolitical conflicts such as in Ukraine and the Ebola epidemic. The report said global economic growth will strengthen subject to risks including the normalization of US interest rates; fragilities in the euro area; vulnerabilities in emerging economies; geopolitical tensions ; and varied monetary and policy stance around the world.