January 24, 2019:

India will continue to remain the world's fastest-growing large economy in 2019 as well as in 2020, much ahead of China, a UN report said.

According to the UN's World Economic Situation and Prospects (WESP) 2019, India's GDP growth is expected to accelerate to 7.6% in 2019-20 from an estimated 7.4% in the current fiscal ending March 2019.

The growth rate may come down to 7.4% a year later.

In the case of China, the growth is estimated to decelerate to 6.3% in 2019 from 6.6% in 2018. It may further go down to 6.2% in 2020.

"Growth (in India) continues to be underpinned by robust private consumption, a more expansionary fiscal stance and benefits from previous reforms. Yet, a more robust and sustained recovery of private investment remains crucial to lift the medium-term growth," WESP report said.

Referring to China, it said the growth is expected to moderate from 6.6% in 2018 to 6.3% in 2019, with policy support partly offsetting the negative impact of trade tensions.

The report further said the global economy would continue to grow at a steady pace of around 3% in 2019 & 2020 amid signs that global growth has peaked.

However, a worrisome combination of development challenges could further undermine growth, it added.

The report also highlighted that global trade tensions pose a threat to the economic outlook. Amid the rise in global trade tensions, world trade growth moderated over the course of 2018 to 3.8% from growth of 5.3% in 2017.

While tensions have materially impacted some specific sectors, stimulus measures and direct subsidies have so far offset much of the direct economic impacts on China and the US, it said.

"But a prolonged escalation of trade tensions could severely disrupt the global economy," WESP report said.

Directly impacted sectors have already witnessed rising input prices and delayed investment decisions.

These impacts, it said, can be expected to spread through global value chains, particularly in East Asia.

Slower growth in China and the United States could also reduce the demand for commodities, affecting commodity exporters from Africa and Latin America.

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