Economy

OECD Development Centre pegs India’s GDP growth at 7.4% this fiscal

K.R. Srivats New Delhi | Updated on July 17, 2018 Published on July 16, 2018

Says Emerging Asia poised for continued strong growth

The Indian economy is expected to record 7.4 per cent growth in 2018-19, a new report by the OECD Development Centre has projected. In its update to the Economic Outlook for South-East Asia, China and India, the OECD Development Centre sees Indian economy recording 7.5 per cent GDP growth in 2019-20.

This growth projection for 2018-19 falls within the 7-7.5 per cent range forecast by the Economic Survey released by the Indian Government in January.

Economic growth in Emerging Asia, the 10-member countries of the Association of South-East Asian Nations (ASEAN), China and India, is expected to remain stable in the near-term, according to the update.

Average real gross domestic product (GDP) in the region is expected to grow 6.6 per cent in 2018 and 6.5 per cent in 2019, because of robust consumption and investment, the update said.

“Emerging Asia stands to show continued strong growth in the near term if domestic and external risks are properly managed,” said Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary-General on Development.

The update has been produced by OECD Development Centre in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Economic Research Institute for ASEAN and East Asia (ERIA).

The 10 ASEAN economies are expected to see average growth of 5.3 per cent in both 2018 and 2019, with the highest rates in Cambodia, Lao PDR and Myanmar (the CLM countries), Vietnam and the Philippines.

Overall, the external positions of Emerging Asian economies remain stable; current account balances have improved in a number of economies in the region and foreign direct investment data flows are strong.

Policy direction

Policy rates in the region have been increased, mainly in response to increases in inflationary pressure and weakness in some local currencies, though monetary authorities have also used reserve requirements to maintain liquidity. Overall, the fiscal positions of Emerging Asian economies are relatively sound. The fiscal policy direction, however, is mixed.

According to the update, risks include the effects of rising interest rates in advanced economies, uncertainty about the implementation of planned infrastructure projects and the consequences of rising protectionist sentiments internationally on regional integration.

A special chapter of the update addresses the challenges and opportunities facing Emerging Asia in developing cross-border e-commerce.

The region is already a major player in e-commerce, and should continue to contribute to the sector’s global growth in the future. The use of information and communications technology (ICT), ICT infrastructure, transportation and logistics, payment systems, and legal and regulatory frameworks will all affect such future growth.

To benefit from fair and efficient cross-border e-commerce, governments in the region will need to improve connectivity, develop skills and human capital, implement new policies to address digital security and consumer protection, and foster regional and international co-operation, the update said.

Published on July 16, 2018
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