United Nations, May 17: India remains the world's fastest growing major economy in the UN's latest survey of the global economy which on Thursday raised India's growth rate prospects to 7.5 per cent for this year and 7.6 per cent for the next year because of "robust private consumption", supportive fiscal policies and benefits from past reforms.
The update to the "World Economic Situation and Prospects 2018 report" raised by 0.3 per cent the gross domestic product (GDP) growth estimate for this year that was made in the report last December and the estimate for next year by 0.2 per cent.
The UN estimate is slightly higher than the 7.4 estimate made for this year by the International Monetary Fund (IMF) earlier this month, but lower than the 7.8 IMF estimate for next year.
The update also raised the world economic growth outlook to 3.2 per cent for this year and the next, an upward revision by 0.2 per cent for the current year and 0.1 for 2019 fiscal year.
The report said that short-term prospects for the global economy continued to improve because of the "further uptick in the growth outlook for developed economies in 2018 on the strength of accelerating wage growth, broadly favourable investment conditions, and the short-term impact of the fiscal stimulus package in the United States".
However, Dawn Holland, the head of the Global Economic Monitoring Branch at the UN Department of Economic and Social Affairs (UNDESA), warned at a news conference that if the tariff war initiated by President Donald Trump were to "spiral out of control" with retaliatory measures spreading to other sectors and to countries, the global economic growth next year could plunge to as low as 1.8 per cent next year.
She said at a news conference that it would create a "void of uncertainty" for companies who would not be sure where to produce or what to produce.
Later she told IANS that India would be relatively sheltered from such a dire downturn because of it is less dependent on the broader world economy and its growth being driven more by internal factors like increasing domestic consumption.