India to record 7.9% growth this fiscal: UN

The United Nations has projected a growth of 7.9 per cent for India in the current fiscal as it hailed the country along with China for leading developing nations to recovery from the worst economic downturn since World War II.

In its 2010 World Economic Situation and Prospects report, the world body has predicted that the global economy will grow by three per cent this year and then by another 3.1 per cent next year.

The report of the UN Department for Economic and Social Affairs (DESA) noted that the global economy is slowly rebounding from the worst of the recession but said most of the developed economies remained "lacklustre" and could not provide "sufficient impetus to the global economy."

"While developing Asia, particularly China and India, is leading the way among developing countries, the recovery is much more subdued in many economies in Africa and Latin America," the report said.

About India, it forecast the growth this financial year to be 7.9 per cent while for China it predicted 9.2 per cent growth.

It said the world's developed economies are expected to collectively grow by only 1.9 per cent this year and 2.1 per cent in 2011, with countries in the Euro zone struggling most of all.

The report credited fiscal stimulus packages and expansionary monetary policies introduced by governments worldwide for the recovery. Household consumption and business investment are both showing tentative signs of revival and international trade is also on the increase again, although still below its pre-crisis peak.

"The good news is that the crisis in the real economy has abated and we see continued recovery, but at the same time it's weak and uneven," said Rob Vos, director of Development Policy Analysis in DESA said.

He said the "bad news is that there's continued downside risks to this outlook which may lead us to mediocre growth prospects for the coming years."

The report notes that the global economy still contains important weaknesses, with credit flows to non-financial sectors remaining relatively weak, especially in some wealthier industrialised nations.