Indian economy to grow at 6.4% rate in 2013: United Nations

NEW DELHI: Indian economy is likely to grow at 6.4 per cent rate in 2013, outpacing the 6 per cent expansion in developing Asia-Pacific economies in the same period, a United Nations report on Thursday said.

"India is expected to recover from its relatively low 5 per cent growth in 2012 to 6.4 per cent in 2013...Economic growth in the developing countries of Asia and the Pacific is projected to inch up to 6 per cent in 2013," United Nations' Economic and Social Survey of Asia and the Pacific 2013 said.

Unveiling the report here, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said: "India's economic growth in 2013-14 will be better than 2012-13, but will be lower than the pre-crisis level. We need to organise ourselves to go back to pre-crisis level of growth rate."

According to International Monetary Fund ( IMF), Indian economy is projected to grow by 5.7 per cent in 2013 calendar year. Economic growth in FY'13 is expected to be at decade low of 5 per cent due to global slowdown, according to estimates.

In the Budget, Finance Minister P Chidambaram had said the government was targeting a growth of 6.1-6.7 per cent for the current fiscal.

From a high over 9 per cent GDP growth for many years prior to the 2008 crisis, the economy grew 6.5 per cent last year and is projected by analysts to slow down further to a decadal low of 5.5 per cent or even lower this fiscal.

Meanwhile, the increase in economic growth of the developing Asia-Pacific nations to 6 per cent in 2013 from 5.6 per cent in 2012 is partly due to an expected improvement in global demand arising from steady, although sub-par, growth in the United States and a limited rebound in the performance of major emerging economies, the UN report added.

Growth in China is forecast to reach 8 per cent in 2013, slightly up from 7.8 per cent in 2012. Republic of Korea's economic growth is forecast at 2.3 per cent in 2013 against 2 per cent in 2012. Economic growth in Singapore is forecast to be 3 per cent in 2013 from 1.3 percent in 2012.

In contrast, as a group, growth of Pacific island economies is projected to decelerate in 2013 due a sharp energy sector slowdown in Papua New Guinea, which is by far the largest Pacific island, the report said.

Meanwhile, talking about India's current account deficit (CAD) which has touched a record high of 6.7 per cent in the October-December quarter of last fiscal, Rangarajan said," I believe that macroeconomic stability is necessary pre-condition for faster economic growth. Keeping CAD at an appropriate level is extremely important."

Asked impact of falling commodity prices on India's economy, Rangarajan said: "In general, if commodity prices come down then it will be beneficial for countries like India."

Yesterday, gold prices had fallen to its lowest level in 20-month by losing Rs 90 to Rs 26,350 per ten grams. Today, it recovered by Rs 250 in line with a recovery in global prices.

Crude oil (Brent) prices have also fallen below USD 100 a barrel in the global futures market.