India's economy is expected to grow at 7.5 per cent this year, driven by domestic demand and consumption as well as improved fiscal position due to lower oil import bill, an UNCTAD report said today.
Asia has again been the most dynamic region, as in the previous years and is estimated to account for almost half of total global growth in 2015, the report said.
"Growth is being driven essentially by domestic demand, with an increasing contribution of consumption, both public and private," said the 'Trade and Development Report, 2015', released by United Nations Conference on Trade and Development (UNCTAD).
"Meanwhile, lower oil prices have eased current account deficits in several countries, such as India and Pakistan, and the former economy is forecast to expand by more than 7 per cent," it said.
In a table representing World Output Growth, 2007-2015, UNCTAD has forecast India's GDP at 7.5 per cent.
The Indian economy expanded by 7.1 per cent last year, as per UNCTAD data.
The government's projection of economic expansion at 8.1-8.5 per cent in the current fiscal 2015-16 is much higher than projected by the UN body.
The Reserve Bank of India (RBI) in its latest monetary policy review has cut the GDP growth projection to 7.4 per cent, from its earlier estimate of 7.6 per cent, on slower global and trade expansion as well as lack of appetite for new investment in private sector domestically.
The report has projected a combined growth rate for East, South, South-East Asia in range of 5.5-6 per cent in 2015.
Investment rates have been very high in comparison with other regions and should remain so, given the region's infrastructure needs. Most Asian countries, particularly China, seem to be re-balancing the structure of their demand, it added.
However, it said the bursting of the stock market bubble in China has increased economic uncertainty, as it could affect domestic demand.
"Nevertheless, the growth of private consumption is essentially based on rising incomes rather than on credit or an appreciation of asset values, which should ensure sustainability," said the report.
