United Nations: India is seeing “an exceptionally high growth” in a “relatively challenging global environment”, according to Senior Economist Ingo Pitterle.
He made the observation at the release of the UN’s World Economic Situation and Prospects 2026 (WESP) report on Thursday, which said that India was keeping its rank as the world’s fastest-growing major economy with 6.6 per cent gross domestic product (GDP) growth.
Pitterle, who heads the UN’s Global Economic Monitoring Branch, said that the estimate for India’s gross domestic product (GDP) growth for last year was “significantly upgraded” by 1.1 per cent to 7.4 per cent from the projection made in the mid-term WESP last May.
Similarly, the projection for this year was raised by 0.2 per cent to 6.6 per cent.
The upgrade, he said, “reflects an exceptional combination of factors which have all worked in the direction of stronger growth in India, of a very dynamic economy”.
One of the factors was consumer demand, and another was investment, with public investment being strong, he said.
Inflation falling significantly, “partly due to a very abundant harvest”, enabled the central bank to lower interest rate and provide a monetary impulse, was another contributory factor, he said.
“We had a positive fiscal impulse to investment, and we had a positive impact on GDP from the agricultural sector, on top of all the other strong growth drivers India was having”, he Pitterle.
The director of the Economic Analysis and Policy Division, Shantanu Mukherjee, said that the impact of the tariffs imposed on India by US President Donald Trump was softened by the diversification of India’s export markets to the EU (European Union) and to the Middle East.
“One of the strongest exports from India at this point in time is services exports, and this has remained resilient, even if merchandise exports have been affected by tariffs”, he added.
Moreover, the “domestic drivers of growth have been exceptionally strong, and there has been good revenue collection as well”, he said.
Trump has imposed a tariff of 50 per cent on India, although there are exemptions and varying rates for certain sectors.
The WESP put a spotlight on artificial intelligence, saying the “rapid developments present both opportunities and challenges”.
Mukherjee said India could take advantage of the opportunities from AI by strengthening its services exports and “rely on its skilled manpower, to develop some of the applications that will take AI into a productivity boosting factor, rather beyond where it is right now”.
(IANS)
