India to grow at 7.5 pc in 2012-13, says UN body
The local unit gave up a chunk of its gains against the dollar as traders doubted the measures, including requiring exporters to convert half their foreign exchange holdings into rupees, would be enough to prevent more falls in the local unit.
India is projected to see a faster growth of 7.5 per cent this fiscal on the back of higher savings and investment rates, even as most of the Asia-Pacific economies are likely to expand at a slower pace, says a UN report.
"The Indian economy's strong fundamentals, namely high saving and investment rates and rapidly expanding labour force and middle class, will ensure a steady economic performance... We expect it to expand by about 7.5 per cent in 2012-13," UNESCAP chief economist Nagesh Kumar said.
The growth estimate in the current fiscal is higher than the estimated 6.9 per cent growth in the last fiscal year.
The Indian government has projected the economy to expand by 7.6 per cent in the current fiscal.
The UNESCAP report, however, said that weaknesses of major developed economies pose a major threat to the growth in the Asia-Pacific region, which could come down to 6.5 per cent in 2012, from 7 per cent in 2011.
"The higher cost of capital and reduced demand for regional export, combined with loose monetary policies and trade protection measures of some advanced economies, contributes to this slowing of Asia-Pacific growth in 2012," United Nations under-secretary-general Noeleen Heyzer said.
She said the Asia-Pacific economies should try to maintain a growth-inflation balance, cope with capital flows and exchange rate volatility and create jobs to achieve high growth.
As regards India, the UN report said there are indications the economy is turning around as core sectors, including manufacturing, show signs of recovery.