Indian economy to grow by 6.4%

Business, Normal

The National, Thursday 25th April 2013

 THE Indian economy is likely to grow at 6.4% rate in 2013, outpacing the 6% expansion in developing Asia-Pacific economies in the same period, a United Nations report says.

“India is expected to recover from its relatively low 5% growth in 2012 to 6.4% in 2013 … Economic growth in the developing countries of Asia and the Pacific is projected to inch up to 6% in 2013,” the UN Economic and Social Survey of Asia and the Pacific 2013 said.

Unveiling the report, Indian prime minister’s economic advisory council chairman C Rangarajan said: “India’s economic growth in 2013-14 will be better than 2012-13, but will be lower than the pre-crisis level. We need to organise ourselves to go back to pre-crisis level of growth rate.”

According to International Monetary Fund (IMF), Indian economy is projected to grow by 5.7% in 2013 calendar year. Economic growth in FY’13 is expected to be at decade low of 5% due to global slowdown, according to estimates.

In the budget, Indian finance minister P Chidambaram had said the government was targeting a growth of 6.1-6.7% for the current fiscal.

From a high over 9% GDP growth for many years prior to the 2008 crisis, the economy grew 6.5% last year and is projected by analysts to slow down further to a low of 5.5% or even lower this fiscal year.

Meanwhile, the increase in economic growth of the developing Asia-Pacific nations to 6% in 2013 from 5.6% in 2012 is partly due to an expected improvement in global demand arising from steady, although sub-par, growth in the United States and a limited rebound in the performance of major emerging economies, the UN report added. 

Growth in China is forecast to reach 8% in 2013, slightly up from 7.8% in 2012. Republic of Korea’s economic growth is forecast at 2.3% in 2013 against 2% in 2012. Economic growth in Singapore is forecast to be 3% in 2013 from 1.3% in 2012.

In contrast, growth of Pacific island economies is projected to decelerate in 2013 due a sharp energy sector slowdown in Papua New Guinea, which is by far the largest Pacific island, the report said. – AFP

Meanwhile, talking about India’s current account deficit (CAD) which has touched a record high of 6.7 percent in the October-December quarter of last fiscal, Rangarajan said:” I believe that macroeconomic stability is necessary pre-condition for faster economic growth. Keeping CAD at an appropriate level is extremely important.”

He said if commodity prices in the country’s economy comes down it will be beneficial for countries like India.”