Economy Growth: UN Report Reveals India Would be The Fastest-Growing Economy in 2016
United Nations said in its World Economic Situation and Prospects (UN-ESCAP) 2016 report that India will be the fastest-growing big economy in the world in 2016. The report estimated the growth to be at 7.3 percent in 2016, and to be improving even further to 7.5 percent in 2017.
As for last year, India already managed to maintain a 7.5 percent GDP growth in the year's first quarter, compared to China's 7 percent. India's economy also accounts for over 70 percent of South Asia's GDP last year.
Not only India, South Asia is also expected to be the world's fastest growing region in 2016 and 2017 despite challenging global conditions. The report says that the majority of South Asia countries will experience accelerated growth over the next two years. The main driver of the growth would be strong private consumption, offsetting relatively tight fiscal policies and slow-moving exports, according to Economic Times.
Economist and Head of UN-ESCAP South and South-West Asia, Nagesh Kumar, stated that fiscal policy can help speed up investment in education and infrastructure. The investments will not only boost economic growth rate but will also accommodate growth for the future.
Kumar also noted the importance of spending in social sectors to help support economic growth. "Spending on infrastructure, health and education are very low compared to other nations such as China in the region. So there is room to expand. And for that, you need fiscal space and you need to look at how to increase revenues. So this is the time for India to recheck fiscal efforts and raise revenues and do more spending on some of the social sectors," he said.
According to Times of India, the sharp decline in the prices of oil, metals and food contributes to the improvement of the macroeconomic environment in India. Consumers, as well as investors, also take confidence in the country's economic growth despite the fact that the government faces difficulties and obstacles in implementing its reform agenda and some economic indicators.
India Today summed up India's current economic growth situation. It's reported that India's annual per capita income has increased from $900 in 2000 to $2,800 in 2015. According to total individual wealth, India is the 10th richest country in the world, with the capital Delhi hosting more than 1,350 multi-millionaires in 2015, compared to 430 multi-millionaires in 2004. The growth is not seen only in the capital because apparently seven out of 20 super-rich cities in Asia Pacific are in India.
The report has infused more optimism to India's people, government, also investors and consumers. The report also said that the economic growth could be sustained for the years to come, establishing India as the fastest growing economy in 2016.