UN lowers India growth forecast; expects momentum to pick up in 2020

GDP growth in India and few other large emerging countries may gain some momentum this year after the global economy recorded its lowest growth of 2.3% in 2019 due to prolonged trade disputes, a UN study said on Thursday while lowering its current and next fiscal forecasts for the Indian economy.

According to the United Nations World Economic Situation and Prospects (WESP) 2020, a growth rate of 2.5% is possible in 2020, but 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% this year, it added.

It lowered its GDP growth estimate for India to 5.7% in the current fiscal (from 7.6% forecast in WESP 2019) and lowered its forecast for the next fiscal to 6.6% (from 7.4% earlier). It has also forecast a growth rate of 6.3% for the fiscal beginning in 2021.

The report pegged India's GDP growth rate for the previous fiscal at 6.8%. According to the UN study, one in five countries will see per capita income stagnate or decline this year, but listed India among few countries where the per capita GDP growth rate could exceed 4% level in 2020.

"These risks could inflict severe and long-lasting damage on development prospects. They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount," UN Secretary-General António Guterres warned.