Growth in South Asia is projected to rebound in 2020 and in India infrastructure and clean energy sectors would be the triggers for growth.
Dr. Nagesh Kumar, Head, UN Economic and Social Commission for Asia and the Pacific, India has a huge potential to grow and is poised to become second or third largest economy of the world.
At the media launch of UN World Economic Situation and Prospects 2020, Dr. Nagesh Kumar and Rajiv Chandran, National Information Officer, UN Information Centre for India and Bhutan took questions from media.
Dr Nagesh Kumar observed that while economic growth in South Asia is forecast to recover to 5. 1 per cent in 2020, but the region will continue to face daunting challenges to sustainable development. The Report states that, the global economy suffered its lowest growth in a decade, slipping to 2.3 per cent in 2019, as economic activity was impacted by prolonged trade disputes. The world, however, could see a slight uptick in growth in 2020 if risks are kept at bay.
Optimistic about global growth, the report cautions that a flare up of trade tensions, financial turmoil or an escalation of geopolitical tensions could derail a recovery. In a downside scenario, global growth would slow to just 1.8 per cent this year. A prolonged weakness in global economic activity may cause significant setbacks for sustainable development, including the goals to eradicate poverty and create decent jobs for all.
At the same time, pervasive inequalities and the deepening climate crisis are fueling growing discontent in many parts of the world.
Economic growth in South Asia is forecast to recover to 5.1 per cent in 2020, after falling to a decade-low of 3.3 per cent in 2019, but it will remain well below the rates seen in the recent past. The region struggled in 2019 with a combination of external headwinds, notably the global economic slowdown and falling trade, and country-specific domestic challenges. As the effects of one-off shocks wane and governments respond with vigorous fiscal expansion, economic activity will rebound in most of the countries.
After experiencing a sharp economic slowdown from 6.8 per cent in 2018 to 5.7 percent in 2019, India has committed to an ambitious fiscal expansion to complement the country’s already loose monetary policy. The combination of the fiscal stimulus and financial sector reforms, boosting investment and consumption, is expected to support a recovery in growth to 6.6 per cent, but it will take continued structural reforms to bring India’s growth back to its previous levels.