UN cuts India GDP forecast to 6.1% for ’13, fears another recession
UN's World Economic Situation and Prospects report also points out that downside risks like the European debt crisis and a hard landing in China could impact India and restrict real GDP growth to 6.5% in the next calendar year.
Presenting a gloomy outlook for the global economy, UN said the growth could revive marginally to 2.4% during 2013 from 2.2% last year.
While the best-case scenario pegs the growth rate at 3.8% with policy reforms across the globe, the worst-case scenario is a near-recession like situation with a measly 0.2% expansion. “A worsening of the euro-area crisis, the fiscal cliff in the US and a hard landing in China could cause a new global recession. Each of these risks could cause global output losses of between 1% and 3%," said Rob Vos, UN's team leader for the report.
India will not be an exception to the global slowdown even though much of its slowdown was due to persistent inflation, high nominal interest rates, large fiscal deficit and political gridlock, the UN report said.
“These factors will likely continue to impact economic growth in the next two years even as moderate recovery is expected,” it said, adding “the scope for policy stimulus in India and other South Asian
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